Geopolitical uncertainties from the ongoing conflict with Iran have kept the Bank of Israel on hold since its March decision, anchoring trader consensus around no change at the July 6 meeting. Inflation has stabilized near the 1-3 percent target midpoint at roughly 2.0-2.2 percent for 2026, with the central bank's forecasts showing balanced price pressures despite a temporary uptick in energy costs. Growth projections were trimmed to 3.8 percent amid security concerns and supply constraints, while one-year inflation expectations remain anchored within the target band. Banks have begun preemptively lowering deposit rates in anticipation of eventual easing toward 3.5-3.75 percent, yet persistent geopolitical risks and the need to assess April CPI data continue to favor a cautious pause through the summer.