Attention: Tomorrow the interest rate in the American economy will be published - something that may also have a large effect on the continuation of the monetary policy of the Bank of Israel.
According to most estimates in the interest rate market, the interest rate on the dollar will rise by a sharp rate of 0.75%, from 1.75% (the upper range today) to 2.5%.
However, there are also estimates that the American central bank, like the Canadian central bank, will surprise and raise the interest rate by a sharper rate of 1%.
This possibility has become less likely in the last week, in view of the decline in inflation expectations in the US, mainly due to the decline in sea freight prices, in the commodity market and in the price of oil in particular, as well as the first signs of a cooling of the labor market in the US - all of which led to the moderation of expectations that the Federal Bank will raise the The interest is in percent.
The American central bank is anxiously following the data on the economic activity of the American economy and the increasing signs indicating its slide into recession.
Although the rate of inflation in Israel is far from being similar to that in the US, and in fact constitutes half of it, it seems that the Bank of Israel is careful not to stray too far from the interest rate in the US for the time being.
The consumer price index in Israel has indeed reached a level of 4.4% in the past year - an 11-year record, but it is far from the price increases overseas - the American index jumped by 9.1% compared to last June - a record since 1981. The situation in Europe is also similar to the USA - inflation has already jumped to an annual rate of 8.6%.However, the interest rate on euro deposits rose only last week from minus 0.5 to zero.
"The main reason why the Bank of Israel will raise the interest rate by 0.5% in the upcoming decision is that the Fed is expected to raise the interest rate by 0.75%," explained in a conversation with "Israel Hayom" chief financial markets strategist at Bank Hapoalim, Modi Shafrir, "Governor Yaron continued to take Recently, a 'nice' tone, similar to the senior executives of the world's central banks, who recently declared their intention to front load the process of raising interest rates - a fact that supports the continued flattening of the curves in Israel.
"The governor said that 'we are determined to fight inflation and make sure it does not reach the levels we see in Europe', but hinted that the rate of interest rate increases will be moderate compared to the rate in the US - 'The process now in policy is like moving from a city road to a highway, it should not be done too slowly And not too fast."
Shafferer adds and says that it is possible that one of the reasons why the Bank of Israel makes sure to keep up with the American pace of interest rate increases is the intention not to widen the currency gap between the dollar and the shekel, so as not to cause the shekel to weaken - something that would accelerate inflation.
According to him, "It is possible that among the Bank of Israel's considerations is the assessment that if the Fed raises the interest rate sharply and the Bank of Israel does not raise it, it will cause the shekel to depreciate and accelerate inflation. The Bank of Israel does not declare this officially, they rather maintain ambiguity."
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