The Bank of Israel published updated inflation expectations data showing current one-year expectations at 1.5 percent based on capital market measures and 1.8 percent based on the average of private-sector forecasts, internal interest rates of the five large banks and inflation contracts. Longer-term market-based expectations remained contained, at 1.7 percent for the second year forward, 2.0 percent for the third year forward, 1.9 percent for years 3 to 5, 1.6 percent for five years and 1.5 percent for years 5 to 10. Compared with June 2026, most measures were unchanged. The average 12-month forecast increased from 1.7 percent to 1.8 percent, while the third-year forward expectation rose from 1.9 percent to 2.0 percent and the years 3 to 5 forward measure from 1.8 percent to 1.9 percent. The Bank of Israel notes that capital-market-based expectations are derived from breakeven inflation between indexed and unindexed government bonds and may include risk premiums and biases related to taxation, liquidity and market depth.
Bank of Israel updates inflation expectations, one-year readings range from 1.5 percent to 1.8 percent and longer-term measures remain between 1.5 percent and 2.0 percent
The Bank of Israel updated its inflation expectations data, with current one-year readings at 1.5 percent from capital markets and 1.8 percent from forecasts, bank internal rates and inflation contracts. Longer-term expectations remained in a 1.5 percent to 2.0 percent range, with only modest increases from June in some forward measures.