Israel Central Bank May Pause Rate Cuts This Week After Two Straight Reductions

According to Jin10, a Reuters survey showed most economists think the Bank of Israel may pause rate cuts on Tuesday, although some expect the central bank to lower rates again. Of the 14 economists surveyed, eight expected no change and six expected another 25-basis-point cut to 3.25%. The Bank of Israel's Monetary Policy Committee will announce its rate decision on Tuesday. The committee cut rates by 25 basis points at both its May and July meetings, and the benchmark rate is currently 3.5%, the lowest level since late 2022. Most economists said the central bank still has room to cut rates because Israel's annual inflation rate is only 1.5%, within the official 1% to 3% target range, and a stronger shekel is helping curb price pressures. Based on bond market yields, inflation is expected to remain stable over the next year.