Geopolitical uncertainties stemming from the ongoing Israel-Iran conflict have prompted the Bank of Israel to hold its benchmark rate steady at 4 percent since the March decision, with traders assigning the strongest probability to no change at the July 6 meeting. Elevated global energy prices have lifted near-term inflation risks, even as the central bank’s 2026 forecast remains anchored near the 2.2 percent midpoint of the 1–3 percent target range and growth projections sit at 3.8 percent. Recent Monetary Committee statements highlight balanced inflation expectations alongside persistent supply constraints and fiscal pressures, reinforcing caution against immediate easing. A modest decrease retains secondary support if April CPI data and any ceasefire stabilization confirm a return to subdued price pressures, while any increase faces significant barriers given the current easing trajectory and resilient economic activity.