The Bank of Israel’s October 21 decision to hold the benchmark rate at 3.25% after three prior cuts has anchored trader expectations for the November 23 meeting. Inflation remains inside the 1-3% target at 1.6% annually, with staff forecasts projecting 1.5% for 2026, yet the Monetary Committee cited persistent geopolitical risks, shekel depreciation of 3.1% versus the dollar since the prior meeting, and fiscal uncertainties around defense spending and the budget deficit as reasons for caution. Updated growth projections of 5.6% for 2026 and 7.5% for 2027 are tempered by the large contribution from production abroad, which does not fully reflect domestic activity. Minutes released November 4 and Governor Amir Yaron’s emphasis on data-dependent policy continue to support the market’s strong preference for no change over a modest easing step.