Fischer, whose Hebrew name was Shlomo Ben Pesach Hacohen, was born in Northern Rhodesia (now Zambia) and grew up in Southern Rhodesia. In his youth, he was active in the Habonim Dror movement, and his connection to Israel remained a constant throughout his life.

His academic career began at the London School of Economics, followed by a doctorate from MIT, where he later became a professor and chaired the economics department. Among his students was Ben Bernanke, who went on to serve as Federal Reserve chairman and win a Nobel Prize. In the 1980s, Fischer contributed to Israel's economic stabilization plan as part of an American advisory team.

Fischer held prominent global positions, including deputy managing director of the IMF, chief economist of the World Bank, and vice chairman of Citigroup. His work in these institutions faced scrutiny, notably from Nobel laureate Joseph Stiglitz, who criticized Fischer's independence in Globalization and Its Discontents due to his ties to the US government.

In May 2005, Fischer moved to Israel to lead the Bank of Israel for eight years. During his tenure, a new law broadened the governor's authority, a change Knesset member Shelly Yachimovich said was designed around Fischer's exceptional leadership. Both Global Finance and Euromoney named him among the world's top central bank governors, and in 2013, he was awarded the Herzog Prize for his contributions to Israel.

Amid the eurozone crisis, Fischer cautioned that Israel's economy faced potential challenges but commended the fiscal discipline of Prime Minister Benjamin Netanyahu and Finance Minister Yuval Steinitz. "They will enable us to manage the economy in a way that supports continued growth," he stated. In 2011, he sought the role of IMF chairman but was ruled ineligible due to age limits.

After leaving Israel, Fischer served as vice chairman of the Federal Reserve under Janet Yellen from 2014 to 2017. He briefly joined Bank Hapoalim as a director, stepping down in June 2021 for personal reasons.

Fischer lived in Herzliya. His wife, Rhoda Fischer, whom he met in the youth movement, died in 2020. He later formed a relationship with Dr. Anna Krassiko-Trev. His three sons reside in the United States: Michael Fischer is a doctor, David Fischer was vice president of marketing at Facebook, and Jonathan Fischer leads the production company Groundswell. In 2014, Fischer's wealth was estimated between 14 million dollars and 56 million dollars (44 million shekels to 176 million shekels).

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Israel's Consumer Price Index rose by 0.1% in June, in line with analysts' forecasts, as the country grapples with persistent inflation, a new report by the Central Bureau of Statistics reveals.

The annual inflation rate climbed to 2.9%, remaining within the Bank of Israel's target range but edging closer to the upper limit. A sharp increase in rent prices, particularly for new tenants, stood out among the various factors contributing to the overall price increase.

Significant price increases were observed in several categories: culture and entertainment rose by 1.2%, housing by 0.5%, and food and home maintenance each increased by 0.3%. For instance, the price of ice cream increased by 4.2%, wheat beer by 1.9%, crackers by 1.7%, and tahini by 1.5%.

Notable price decreases were recorded in fresh fruits and vegetables, which fell by 2.5%, transportation and communication, down by 0.4%, furniture and household equipment, down by 0.3%, and healthcare, which decreased by 0.2%.

Rent prices saw a substantial increase. For tenants renewing their leases, monthly rent rose by 2.2%, while new tenants (in sample apartments with tenant turnover) faced a steep 4.2% rise.

In the housing market (which is not included in the Consumer Price Index), there was a 0.8% increase when comparing transaction prices from April-May 2024 to those from March-April 2024.

A year-over-year comparison reveals dramatic regional differences in housing prices. Breaking down by district, the following price changes were observed: Jerusalem (2.1%), Northern District (0.6%), Haifa (0.7%), Central District (0.0%), Tel Aviv (1.2%), and Southern District (0.2%). Prices for new apartments decreased by 0.5%. Overall, housing prices rose by 3.4% over the past year.

In a year-over-year comparison of transaction prices from April-May 2024 to April-May 2023, the annual housing price index increased by 3.4%. All districts saw price increases: Haifa (8.3%), Northern District (4.9%), Southern District (3.6%), Jerusalem (2.9%), Tel Aviv (2.6%), and Central District (2.3%). The annual index for new apartment prices decreased by 0.9%.

Analysts predict that inflation will reach 3% as soon as July, hitting the upper limit of the Bank of Israel's target range. The central bank's forecast for the next 12 months projects an inflation rate of 3.2%.

In May, the CPI rose by 0.2%, with an average increase of 2.8% over the past 12 months. May's index was notably impacted by fruit and vegetable prices, which surged by over 10%. Conversely, Israelis' expenditures on overseas travel and domestic tourism decreased by 7.4%.

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The Bank of Israel recently published data on delays in household loan repayments in Israel. The data shows that borrowers with more than 90 days of delinquency, saw an increase of over 40% compared to last year. The late payments are worth  3.2 billion shekels (888 million dollars).

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The data also shows a significant increase in general-purpose loans, totaling some 570 million shekels ($160 million). This represents a 26% increase year over year .

The Bank of Israel also lifted the ceiling for the amount of credit you can get through collateral mortgages, from 50% of its value to 70% of the home's value. More than a quarter of bank accounts in Israel were overdrawn all year, the data shows. 

These and other data highlight the need for households to manage the family budget on an ongoing basis and with the involvement of all family members. This also means that households should look at their credit to see if it is managed optimally and make changes if necessary.

Here are some ways to properly manage a household credit portfolio:

• Try to pay bills in full and on time – delinquent payments hurt your credit rating.
• Avoid taking new loans or credit cards unnecessarily.
• Try to negotiate good interest rates from the financial institutions you work with - long-time customers may be treated preferentially.
• Consider consolidating small debts into one loan under a debt arrangement, this can ease repayment.
• Closely monitor your statements and accounts to identify anomalies or unreasonable charges.
• Consider getting credit from sources you haven't accessed before, while closely examining the repayment terms.
• Plan for the long term – wise savings and investments can reduce the need for credit in the future.

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Bank of Israel Governor Amir Yaron appeared to show a readiness to stop raising interest rates after this week's 25 basis points hike. Speaking with Israel Hayom, he left room for action should economic surprises emerge that could have him continue raising borrowing costs. 

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Asked about the recent government decision to give costly allowances to ultra-Orthodox constituents as part of the Coalition agreements, he said, "I would like all Haredi children to have an equal opportunity to join the job market and have the necessary skills to do that."

He appeared to send a warning that the government's decision might not serve this goal, and does not properly tackle the cost of living. 

Q: Knesset Member Israel Eichler (United Torah Judaism) said you have failed to bring down inflation and there you must submit your resignation.

"I have long been aware of his insights. In 2019, I gave a speech highlighting the importance of the Haredi sector, the importance of obtaining skills, and the Haredim's contribution to the growth of Israel's economy. The figures show that taxes will have to go up by 16% if demographic trends continue. He called me antisemitic after that speech, so allow me to ignore what he said." 

Q: But on the merits of what he said, perhaps higher interest rates have not delivered the goods? 

"The opposite is true. The process of raising interest rates, which we have led with resolve, has won much praise from all the international bodies. You have to realize what would have happened had we not done that: We would have found ourselves with much higher inflation, perhaps in the double digits – much like some countries have been experiencing. I would like to remind you that this kind hurts income and inflicts particular pain on the weaker classes. We could have reached a situation where people turn to other currencies when writing up contracts such as lease agreements. These would have damaged financial decision-making in Israel. Thus, we have to understand what the alternative price would have been for our actions. We understand that the process of raising interest rates causes pain, but if we had not acted this way, it would have been much worse and the risk of inflation getting worse would have been that much greater." 

Q: When will we be able to see hikes stop? 

"Of course, I am not going to give a promise, since we make each decision based on the data and on what we anticipate. We were taken aback by the latest consumer price index for how high it was – and we weren't the only ones. Although it had one seasonal component that was high, the bottom line is that inflation remains stubborn. We also expect the next CPI to be high. But if no big surprises emerge in the next CPI – and if there are no events that could lead to a significant depreciation of the shekel – we would be able to say that we are already in an interest rate environment that we asses to be sufficient for having us move toward the inflationary goal." 

Q: Does that mean that you won't go beyond this week's decision and the benchmark interest rate will stay at 4.75%? 

"While this is what we assess, this is not a pledge. We are determined and we continue doing whatever it takes. Right now, we just have an assessment that we have an environment that helps reduce inflation back to its goal as we see the current circumstances. In any event, we act based on the figures and we will do everything we can if needed." 

Q: Do you feel that you are on your own in this battle? Should the government do more? 

"We must make a distinction between the cost of living and the recent wave of price increases. In specific events – like after the outbreak of war in Ukraine – the government can definitely help on a temporary basis. But we see that sometimes it is hard to stop this from being a one-off thing. As for the cost of living – I stress once again that Israel is expensive on a range of issues. When it comes to the retail sector, we must make sure to introduce structural reforms. When it comes to housing, we must increase supply, we must boost building permits and zoning approvals, but we also have bids at lower prices. And of course, there is the issue of transportation. Unfortunately, all three things lack a magic wand that could bring a quick fix, but we have to reform those sectors."

Q: You previously said the government's budget was responsible and fiscally restrained. Do you still hold that view? 

"The budgetary framework is conservative and meets the monetary policy, as well as the wage agreements. But within that framework, there are not enough growth-inducing elements or parts that tackle the three main sectors that I mentioned regarding the costs of living." 

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The Bank of Israel hiked benchmark interest rates to their highest level since 2006 on Monday, citing high inflation and a tight labor market, and said upcoming data would determine whether it raised them further.

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The central bank lifted the key rate for the 10th policy meeting in a row, to 4.75% from 4.5%. All 15 economists polled by Reuters had projected the move, with some believing it may be the last.

Despite the steep tightening cycle and signs of some economic moderation, Israel's annual inflation rate stood at 5% in April, near a 14-year high and well above the government's 1%-3% target range, angering the public but boosting banks' profits.

Deputy Governor Andrew Abir said the central bank was pushed to raise interest rates more than it had hoped in recent months due to the government's judicial overhaul plan that has fuelled political uncertainty, prompted sharp criticism at home and abroad, and raised Israel's risk premium – leading to a weaker shekel and higher inflation.

Without a depreciation of the shekel this year, "inflation would probably be somewhere around 4% rather than 5%," he told Reuters, adding that without the series of rate increases, inflation would have been closer to 7%.

Policymakers expect the inflation rate will stay around 5% in May but were looking for an easing afterward, Abir said. "All options are open," Abir said. "You can see a situation where we see inflation starts coming down and we can think that the monetary tightening is mostly done. We can see a situation where the data comes out strong ... and think we need more monetary tightening."

"We have done most of the heavy lifting," he said. "Negotiations over the judicial reform will have an important part in what goes on in the markets and the risk premium of Israel. If we get a compromise that is widely accepted, that will be a good outcome for Israel's economy and will allow us to not have to tighten monetary further."

The central bank's next interest rate decision is on July 10. "Another rate hike in July appears likely unless we get a downward inflation surprise or a stronger shekel," said Jonathan Katz, chief economist at Leader Capital Markets.

Since the prior rates decision in early April, the shekel weakened 1.5% against the dollar. It was 0.4% lower against the dollar after Monday's decision. Abir downplayed the notion of intervention to boost the shekel, saying: "It's clear that the interest rate needs to be the first and predominant tool we use."Israel's economy grew at an annualized 2.5% in the first quarter from the prior three months, and growth in 2023 is expected to ease to 2.5% from 6.5% last year.

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Bank of Israel Governor Amir Yaron said interest rate hikes will likely continue since inflation remains too high, while urging the government to maintain the independence of the country's judicial system.

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In an interview with CNN, Yaron said that in Israel and globally, "we are seeing stickiness of inflation", particularly in services.

"So we are determined absolutely determined to bring inflation back down to its target," Yaron said, referring to the government' 1-3% annual target. "And if that means continuing raising rates, and that is our primary tool, that's what we will do."

Israel's inflation rate reached a 2008 high of 5.4% in January. February data are slated for release later on Wednesday and economists polled by Reuters estimate a 5.0% rate.

In a bid to contain inflation, the Bank of Israel has raised its benchmark interest rate (ILINR=ECI) to 4.25% from 0.1% over the past year.

Yaron also criticized the government's proposals to overhaul the judiciary, saying the plan as of now could weaken the courts' independence.

"The process itself is hasty and does not have a wide agreement in the public," he said.

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The foreign banks' warnings began to come true on Tuesday, with the US dollar's value went up 2% against the shekel to 3.64 in light of investors' concerns over the consequences of the judicial reform in the Israeli government. This has been the sharpest increase since last September and the biggest fluctuation that occurred compared to all other leading currencies worldwide.

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Obviously, the shekel has been weakened compared to all other currencies – 2% compared to the Euro and 2.7% to the Pound Sterling. Foreign exchange market traders said that the second the dollar reached 3.60 and passed this threshold, many stop-loss orders were triggered (closing positions at a loss), and from there, the path to 3.64 was a short one.

What caused the dollar's increase was the Knesset's passing the first reading of the judicial reform package in the plenum and Foreign Minister Eli Cohen's tweet that made its way to Bloomberg's headlines, being interpreted by foreign bodies as possible interference with the Bank of Israel's independence. The tweet was not unusual considering the times, but its timing, paired with the Knesset's provisional passage of the judicial reform, was the spark that set fire to the foreign exchange market.

Although it is only the first reading, and there is still a long way to approve all the reform bills, it is clear that the stock market, especially foreign investors, does not like the fact that there is no widespread consensus regarding the reform. The warnings voiced daily by many senior economists, international organizations, senior officials in the hi-tech industry, and, of course, the non-stop demonstrations, do not contribute to calming the situation, instead only causing alarm.

The abnormal volatility in the foreign exchange market and the sharp increase in 10-year bond yields are likely a promo for what will occur in the future. Even today, Citigroup strategists told Bloomberg that the shekel's value is expected to depreciate by another 8%, and its new target is 3.95. "Despite the 0.5% increase of the Bank of Israel's interest rates, the shekel continues to remain under pressure by local political noise," the strategists said. "It seems that the political situation will become more volatile in the coming weeks when the judicial reforms will be presented for a second reading in the plenum."

Even Peter Kisler, a manager at the "Trium Capital" hedge fund in London, said to Bloomberg in the same article, "It's the judicial reform continuing to weigh on the market. The magnitude of the currency's move has been quite large, but it can still weaken further."

When articles such as this are published in one of the biggest financial portals in the world, which is hard to blame for being left-wing or purposely wanting to harm Israel's economy, it affects the stock market. Foreign exchange traders in foreign banks read the warnings of objective senior officials and understand their message. They have no particular sentiments towards Israel, and if they are convinced that the NIS will weaken, they will continue to increase their shorts on it – like a snowball.

Suppose the USD's value continues to become stronger sharply. In that case, the consequences of the NIS's sharp devaluation are likely to be detrimental to the economy – it will first and foremost likely increase inflation in Israel that refuses to go down in the meantime, which will cause the Governor of the Bank of Israel to increase the interest rate more sharply. While the Bank of Israel has admirable foreign exchange balances amounting to over 200 billion dollars and can intervene in the foreign exchange market and sell USD, its influence is likely negligible compared to the vast amount of buyers.

Finance Minister Bezalel Smotrich's attempts today to calm the situation by making statements to the press, saying that he is not worried about the economy, will apparently not be helpful. Even Prime Minister Benjamin Netanyahu's tweet in which he said that the Bank of Israel's independence would not be violated cannot really help here. If the government stops the legislation and changes the reform so that all parties will accept it, things may return to normal. Israel's economy is strong, and in the meantime, we have seen merely a promo of what is likely to happen later in the future.

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Inflation reared its head once again in July owing to a surprisingly high 1.1% spike in the Consumer Price Index in July, putting Israel on track for the highest year-on-year rise in prices since 2008.

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The  Central Bureau of Statistics published a host of other economic indicators indicating that at the current pace inflation could be as high as 5.2% in 2022, the fastest in well over a decade and almost double the 3% Bank of Israel forecast.

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The Bank of Israel raised its benchmark interest rate by a bigger-than-expected 0.4 percentage points on Monday, the latest move in its aggressive battle against rapidly rising inflation amid strong economic growth and a tight labor market.

The suddenly hawkish central bank lifted its key rate to 0.75% from 0.35%. In April, policymakers had raised the rate from 0.1% – an all-time low where it had stayed for the prior 15 decisions since a 0.15 point reduction at the outset of the COVID-19 pandemic.

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"We are determined to return inflation to its target," Bank of Israel Governor Amir Yaron told Channel 12 News when asked about the aggressive hike, which was in line with moves by other central banks dealing with price pressures.

"At the same time I want to say and reassure, inflation in Israel is 4% ... among the lowest inflation rates in the world."

The 11-year high in April of 4% is well above the government's 1%-3% annual target range, while inflation expectations for the coming year remain around 3.5%. Israel's economy shrank in the first quarter after a robust 2021, but the jobless rate has fallen to 3.1%.

The central bank dismissed an annualized contraction of 1.6% in economic activity in the first three months of 2022, citing 15.6% growth in the fourth quarter.

"The Israeli economy is recording strong growth, accompanied by a tight labor market and a continued increase in the inflation environment," the bank said in a statement. "The (monetary) committee has therefore decided to continue the gradual process of increasing the interest rate."

It added that the pace of rate hikes will be based "in accordance with activity data and the development of inflation."

All 14 economists polled by Reuters had said they expected the monetary policy committee to raise rates, 11 of them predicting a 0.25 point increase with the others projecting a 0.4 point rise.

"Even after the hike, rates in Israel are still at the Federal Fund rate's lower bound," said Yonie Fanning, economist at Mizrahi Tefahot Bank.

"Economic activity in Israel is continuing at a high level," the central bank said. "Indicators of economic activity continue to show levels close to potential, and the pandemic's effect on the economy has declined significantly."

It added that the war in Ukraine and COVID lockdowns in China are increasing inflationary pressure, and leading to a slowdown in the pace of global economic activity.

Analysts expect the key rate to rise 1.5 to 2 points in the next year.

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Israel's gross domestic product will increase by 5.5% in 2022 and 5% in 2023, the Bank of Israel Research Department forecasted, financial daily Globes reported on Monday.

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It also predicted a 1.6% inflation in 2023, in the middle of the 1%-3% annual target range.

While the BOI has kept the interested rate unchanged, some central banks have begun raising their rates due to inflationary pressures, according to Globes.

"The rate hikes are only in countries where inflation is substantially above the inflation target, while in Israel inflation is significantly lower than many countries in the world," the Bank of Israel said.

The bank is in no hurry to increase the interest rate – a move that would strengthen the shekels – which is already appreciating because of the current account surplus.

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