“According to the reports,” he says, “the Ministry of Finance will cancel credit points for families with children aged 6-12 in February. The benefit is planned to return retroactively after the approval of the budget for 2023 in about six months and may even expand to children up to the age of 18. In the meantime, this is a significant loss of income for working families from the middle class which is added to another “blow” of an increase in interest expenses and prices in the last year. In our estimation, this step is expected to have a moderating effect on private consumption, which may also affect inflation.”
More in-
As for what is happening in the bond market, Zabzinski says that yields in Israel have dropped sharply since the beginning of the year, especially in the middle of the curve. “From a strategic point of view, the move is in line with our forecast for a decrease in the rate of inflation in Israel and in the world and a subsequent decrease in interest rates. However, we are reaching a stage where we need to talk not only about the direction of the market, but also about the intensity of the potential decrease in yields. In our estimation, the chance/risk ratio at the level of the current yields no longer justifies taking high risks in the channel.”