The Bank of Israel's next rate decision on September 1 follows its July 2026 cut of 25 basis points to 3.5 percent, the second easing move of the year. Inflation has remained contained near the midpoint or lower end of the 1–3 percent target, with the June print at 1.6 percent year-over-year, supported by a strong shekel and lower energy prices after the U.S.–Iran ceasefire. Economic indicators point to a solid recovery, with staff forecasts showing GDP growth of 4 percent in 2026 and further expansion thereafter, while risk premia have normalized. Traders assign the highest probability to no change because the two-month interval since the last move leaves limited scope for additional data to justify another adjustment, though incoming CPI or labor figures could still support a further cut if disinflation accelerates. An increase remains remote given the absence of upward price pressures.