The Bank of Israel’s established easing bias, reinforced by inflation forecasts of 1.7–2.2 percent for 2026 that sit comfortably inside the lower half of the 1–3 percent target range, is the primary driver behind the 78.5 percent market-implied probability of a rate cut at the May 25 decision. After two 25-basis-point reductions earlier in the year that brought the benchmark to 4.00 percent, the March hold reflected a temporary pause amid energy-price pressures and geopolitical tensions; subsequent stabilization, including recent ceasefire developments, has allowed one-year inflation expectations to settle near 1.5–2.0 percent. With April CPI data imminent and the Monetary Committee’s updated growth outlook likely to support gradual easing toward a 3.5 percent base case, traders price in a high likelihood that subdued price pressures and resilient activity will prompt resumption of the rate path.