The Bank of Israel has published updated inflation expectations data compiled from the capital market, forecasters, banks' internal interest rates and inflation contracts. The current readings place one-year inflation expectations in a 1.7 percent to 1.9 percent range across the four measures, while capital-market forward expectations are 1.8 percent for the second year, 1.9 percent for the third year, 1.8 percent for years 3 to 5, 2.1 percent for five years and 2.0 percent for years 5 to 10. The release also updates annual data for 2021 through 2025 and monthly observations for 2025 and early 2026. For 2025 as a whole, the one-year measures ranged from 1.8 percent to 2.1 percent, and the monthly series show lower near-term expectations in early 2026 than at the start of 2025. The Bank notes that capital-market measures are based on breakeven inflation between unindexed and CPI-indexed government bonds and include risk premia and potential biases linked to taxation, liquidity and market depth.
Bank of Israel2026-05-19
Bank of Israel publishes updated inflation expectations with current one year measures at 1.7 to 1.9 percent
The Bank of Israel published updated inflation expectations from capital market measures, forecasters, banks’ internal interest rates and inflation contracts, showing one-year expectations between 1.7 percent and 1.9 percent and capital-market forward expectations of 1.8–2.1 percent across horizons up to ten years. The release also updates annual data for 2021–2025 and monthly data for 2025 and early 2026, indicating lower expectations in early 2026 than at the start of 2025, and reiterates that capital-market measures reflect breakeven inflation and embedded risk premia.