The Bank of Israel’s May 25, 2026, decision dominates trader positioning, with market-implied odds reflecting a decisive 25-basis-point cut to 3.75 percent. Recent inflation readings have stabilized near the 2 percent midpoint of the 1–3 percent target band, while shekel appreciation has eased imported price pressures and supported the easing cycle after the March hold. Upward revisions to 2026 growth forecasts, alongside a more favorable geopolitical backdrop following recent ceasefires, have reinforced the data-dependent case for resuming cuts that began in late 2025. The Monetary Committee’s communications continue to emphasize gradual movement toward a neutral rate while monitoring labor-market tightness and fiscal developments. Only a sharp reversal in incoming CPI prints or renewed geopolitical escalation would realistically alter the current trajectory ahead of the July meeting.