The Bank of Israel released an updated statistical table on the expected rate of inflation from multiple sources, comparing market-implied breakeven inflation with survey-style forecasts, bank-implied measures and inflation contract pricing, alongside forward expectations across longer horizons. The latest readings show one-year inflation expectations of 1.5 percent from the capital market, 1.7 percent from the average of 12-month-ahead forecasts, 1.9 percent from banks’ internal interest rates and 1.8 percent from inflation contracts. Forward expectations derived from the capital market are shown at 1.7 percent for the second year, 2.1 percent for the third year, 2.2 percent for years 3–5, 1.6 percent for five years and 1.5 percent for years 5–10. The release defines capital-market expectations as breakeven inflation between unindexed and CPI-indexed government bond yields, and notes that this measure includes an inflation-risk premium and potential biases related to taxation, liquidity and market depth, with the Bank of Israel assessing that one-year biases were greater than usual in January 2024; it also sets out how forward rates, the forecast average and the bank- and contract-based series are constructed.
Bank of Israel 2026-03-19
Bank of Israel publishes updated inflation expectations measures with one-year breakeven at 1.5 percent
The Bank of Israel published updated statistics on inflation expectations, comparing market-implied breakeven inflation with survey forecasts, bank measures, and inflation contract pricing. Current one-year inflation expectations are 1.5% from the capital market, 1.7% from forecasts, 1.9% from banks, and 1.8% from contracts. Forward expectations for the second year are 1.7%, rising to 2.2% for years 3–5, then declining to 1.5% for years 5–10.