Trader sentiment for a Bank of Israel rate cut at the May 25 monetary policy decision is anchored in the central bank’s established easing bias following two 25-basis-point reductions earlier in the year that lowered the benchmark to 4.00 percent. Subdued inflation forecasts of 1.7–2.2 percent for 2026, comfortably inside the lower half of the 1–3 percent target range, along with one-year expectations near 1.5–2.0 percent, reinforce expectations that the March hold—triggered by energy-price pressures and Iran-related geopolitical tensions—represented a temporary pause rather than a policy reversal. Recent stabilization and ceasefire developments have allowed activity to remain resilient while price pressures stay contained. Israeli banks have already begun lowering deposit rates in anticipation of a move to 3.75 percent or lower, reflecting market-implied odds that favor resumption of gradual easing ahead of the upcoming announcement.