The elections decided the interest rate
In episode 402 of Calcalist's Money Engines podcast, economist Ori Greenfeld analyzes the Tel Aviv stock market declines following the elections, explaining that the lack of a clear outcome increases the likelihood that the Bank of Israel will not cut interest rates soon, due to political and budgetary uncertainty.
In episode 402 of Calcalist's Money Engines podcast, economist and chief strategist at Agam Leaders Ori Greenfeld analyzes the market's reaction to the elections. The Tel Aviv Stock Exchange returned from the election day break with declines of about 3%, led by banks and real estate stocks. Greenfeld argues that the investor consensus did not like the results, and offers a central economic explanation: the interest rate. According to him, the lack of a clear election outcome significantly increases the chance that the Bank of Israel will not cut interest rates soon, as long as it is unclear whether a government will be formed and what will become of the 2027 budget, which could push the deficit to around 5%-6% of GDP. The weakening shekel also adds inflationary pressure. The episode examines how this affects real estate and banks, and asks whether a transitional government is really bad news, given that in 2019 the market corrected its declines. In the second part, the podcast moves to the US, where the Fed left interest rates unchanged by a vote of 10 to 2, with two members supporting a hike. Chairman Kevin Warsh's uncertainty strategy is examined.