Recent moderation in Israel's inflation to 1.6% in June, the lowest level since 2021 and near the center of the Bank of Israel's 1-3% target range, has anchored trader expectations for a hold at the September policy meeting. The July 25 basis point cut to 3.5% marked the second consecutive easing step amid softer price pressures in food and transportation, yet markets price limited scope for immediate follow-through as the central bank assesses incoming data and external conditions. Geopolitical stabilization following the earlier US-Iran ceasefire has further reduced near-term upside risks to energy costs, supporting the 71% consensus on no change while leaving a minority probability priced for an additional reduction if readings remain subdued.