Israel’s central bank governor on Tuesday said he sees one to two potential interest rate cuts in the second half of this year, suggesting confidence that domestic inflation will ease in the coming months.
Inflation, which hit 3.2% in December, is “still above our target, which is between 1% and 3%,” Bank of Israel Governor Amir Yaron told CNBC’s Dan Murphy at the World Economic Forum in Davos.
“We expect [inflation] … in the first half of the year to go up, partly because of taxes, and partly because, as recovery is happening, we’re seeing demand moving faster than supply constraints,” such as those in the labor market, he said.
But while the bank expects costs to go up in the first half of the year, “in the second half, we are hoping [inflation] will come into balance, moderate itself,” Yaron said. “We are seeing one or two cuts feasible …