The Bank of Israel’s September 1 decision carries an 82.5% implied probability of no change at the current 3.5% policy rate, reflecting the Monetary Committee’s recent pattern of pausing after consecutive cuts in May and July. July inflation printed at a five-year low of 1.5%, well inside the 1-3% target, yet recent shekel depreciation against the dollar has raised imported-price risks and shifted market pricing away from an immediate further reduction. Analysts note balanced inflation risks and the absence of clear urgency after the prior easing steps, with the Research Department forecast still embedding gradual cuts later in the cycle once data confirm sustained convergence toward target. Geopolitical and fiscal uncertainties continue to support a data-dependent stance.