Israel Inflation Expectations: February Print Holds at 1.5%
Israel's inflation expectations for February 2026 remained at 1.5%, matching December's figure and reflecting a subdued inflation outlook. The reading sits below the 12-month average, with markets and policymakers watching for signs of renewed price pressures.
Table of Contents
Big-Picture Snapshot
Drivers This Month
- Energy prices: flat impact
- Shelter: +0.04pp
- Food: -0.02pp
Policy Pulse
February's inflation expectations of 1.5% remain below the Bank of Israel's 2% midpoint target. The central bank continues to monitor for persistent deviations from its 1–3% range.
Market Lens
Market response was muted as the print matched consensus and recent trends. Investors maintained positions in government bonds, with little movement in yields following the release.
Foundational Indicators
Historical Context
- February 2026: 1.5%
- December 2025: 1.5%
- November 2025: 1.6%
- October 2025: 1.9%
- September 2025: 1.7%
- August 2025: 1.6%
Comparative Trends
The 12-month average stands at 1.64%, with the current reading 0.14 percentage points below that mark. The last time expectations reached 1.9% was in October 2025.
Market Lens
Bond markets showed little volatility as expectations have stabilized since December. The shekel remained steady against major currencies.
Chart Dynamics
Forward Outlook
Scenario Analysis
- Bullish (20–30%): Expectations rebound toward 1.7% if energy or wage pressures rise.
- Base (55–65%): Readings remain near 1.5% as current drivers persist.
- Bearish (10–20%): Further softening below 1.4% if external demand weakens.
Risks and Catalysts
Upside risks include commodity price shocks and fiscal stimulus. Downside risks stem from global growth headwinds and domestic demand softness.
Methodology and Sources
Figures sourced from Sigmanomics and official Bank of Israel releases[1]. Methodology: survey-based forward inflation expectations, cross-verified with market-implied breakevens.
Closing Thoughts
Market Lens
Investor sentiment remains cautious as inflation expectations stay anchored. The subdued print supports a steady policy stance, with no immediate pressure for tightening or easing.
Looking Ahead
With expectations below target for three consecutive months, attention shifts to upcoming data for signs of renewed momentum or further moderation.
Key Markets Reacting to Inflation Expectations
Israel's inflation expectations data influences a range of asset classes. Fixed income markets, currency pairs, and select global stocks respond to shifts in forward-looking inflation sentiment. The following symbols have shown sensitivity to Israel's inflation outlook:
- AAPL: Global tech stocks react to inflation trends via risk sentiment and rate expectations.
- EURUSD: The shekel's stability often tracks broader USD and EUR moves after inflation data.
- BTCUSD: Crypto markets respond to inflation data through risk appetite and fiat currency trends.
| Year | Inflation Exp. (%) | AAPL Trend |
|---|---|---|
| 2020 | 0.8–1.2 | Recovery phase |
| 2022 | 1.4–1.7 | Volatile, rate-sensitive |
| 2024 | 1.5–1.8 | Growth, moderate inflation |
| 2026 | 1.5 | Stable, muted reaction |
Since 2020, periods of rising inflation expectations have coincided with increased volatility in AAPL, while stable readings have supported steadier performance.
FAQ: Israel Inflation Expectations: February Print Holds at 1.5%
- What are Israel's latest inflation expectations?
- February's inflation expectations remained at 1.5%, unchanged from December and below the 12-month average.
- Why is this figure significant?
- It signals subdued inflation pressures, keeping expectations below the central bank's 2% midpoint target for a third consecutive month.
- How does this impact markets?
- Market reaction was muted, with bond yields and the shekel showing little movement after the release.
Israel's inflation expectations remain anchored, reinforcing a steady policy outlook and subdued market volatility.
Updated 2/19/26
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
- Sigmanomics database, Israel Inflation Expectations, accessed February 19, 2026.
- Bank of Israel official releases, inflation expectations, 2025–2026.
February's inflation expectations held at 1.5%, unchanged from December and down from October's 1.9%. The 12-month average is 1.64%, indicating a persistent softening since mid-2025. The last six months show a narrow range between 1.5% and 1.9%.
Compared to August's 1.6% and June's 1.9%, the current figure underscores a downward drift. The trend suggests inflation expectations have settled below the central bank's midpoint target.