The Bank of Israel’s September 1 decision to cut its benchmark rate by 25 basis points to 3.25 percent—its third consecutive reduction—has shaped expectations for the October 21 announcement. Annual inflation at 1.5 percent in July remains below the target midpoint, supported by a strong shekel that curbs import prices, while officials cite subdued domestic activity excluding overseas output and a lower risk premium as factors permitting further easing. At the same time, the central bank’s data-dependent stance, mixed second-quarter GDP readings, and fiscal pressures ahead of late-October Knesset elections favor a pause to evaluate the effects of recent cuts and any renewed price pressures. Market pricing reflects this balance, with traders assigning the highest probability to no change while leaving modest room for an additional reduction if inflation remains anchored near current levels.