Geopolitical uncertainties from the ongoing Israel-Iran conflict and associated energy price pressures have kept the Bank of Israel’s benchmark rate steady at 4 percent since the March 2026 decision, supporting trader consensus for no change at the July 6 meeting. Inflation has edged up modestly to around 2.0–2.2 percent—still near the midpoint of the 1–3 percent target—while the central bank’s updated forecasts project 2.2 percent for 2026 overall alongside trimmed GDP growth of 3.8 percent. Governor Amir Yaron has indicated scope for modest easing toward 3.5–3.75 percent by early 2027 if risks subside, which underpins the secondary probability of a July decrease. Markets price in continued caution ahead of the intervening May decision and upcoming inflation prints, with any material shift in security conditions or price data likely to influence the final outcome.