Market-implied odds assign an 80% probability to a Bank of Israel rate cut in the May 25 decision, reflecting the Monetary Committee’s established easing bias and an inflation forecast for 2026 that sits comfortably in the lower half of the 1–3% target range. After two 25-basis-point reductions early in the year brought the benchmark to 4%, the March 30 hold was viewed as a temporary pause amid geopolitical tensions with Iran rather than a shift in policy stance. Recent stabilization in one-year inflation expectations near 1.5–2.0%, resilient non-inflationary growth, and banks’ preemptive reduction of deposit rates have reinforced trader expectations for a 25-basis-point cut to 3.75%. With April CPI data and an updated staff forecast due ahead of the meeting, markets continue to price in a gradual return toward the 3.5% base case outlined by Governor Amir Yaron.