The Bank of Israel’s September 1 decision follows two 25-basis-point cuts that brought the policy rate to 3.5 percent in July, amid inflation readings and expectations anchored near 1.5 percent—well inside the 1–3 percent target range. Traders assign a 72.5 percent probability to no change and 27.5 percent to a further reduction because recent data show stable prices, a recovering economy after regional ceasefires, and supportive shekel strength that has lowered imported inflation pressures. Governor Amir Yaron’s post-July remarks signaled scope for additional gradual easing if conditions hold, while the near-zero odds of a hike reflect the absence of upside inflation risks. Incoming CPI, growth, and labor-market figures over the next two weeks remain the main variables that could shift the balance between a hold and another modest cut.