The Bank of Israel’s Monetary Committee has held the benchmark rate steady at 4 percent in its most recent decisions, citing inflation expectations near the 1–3 percent target midpoint alongside 2026 forecasts around 2.2 percent. Geopolitical developments, including renewed tensions with Iran and associated spikes in global energy prices, have sustained upward pressure on inflation and prompted the committee to trim its growth outlook for the year. Traders assign the highest probability to no change in July because these risks continue to outweigh evidence of easing price pressures, while a modest chance of a modest cut reflects the governor’s earlier remarks that further easing remains possible if inflation data meets expectations. An increase stays remote given the current inflation environment and labor-market tightness.