Looking back at the end of the 1990s, the 10-year JGB yields were around 6.5 percent when inflation rates stayed at around 3 percent. While nominal rates were around 6.5 percent, the expected real rates were around 3.5 percent, if inflation rates were expected to stay at around 3 percent. If inflation rates were higher, the real rates could have been lower.
In terms of inflation-over-the-past-12-months, this is expected only by the fourth quarter of the year. In any case, the Bank of Israel's policy is to adjust the interest rate gradually as and when needed, to avoid unnecessary shocks to the economy and the financial markets.