The present study focuses on analyzing the effect of fiscal and monetary policy and interst rates abroad on Israel’s capital market. We examine whether the government deficit (current and forecast), changes in deficit targets (which were frequent in the last decade), the size of the government debt (as share of GDP), and monetary policy influenced the yields on bonds during the Ninetiens. We also endeavor to ascertain whether monetary policy was directly or indirectly affected by fiscal policy, and if - and to what extent - yields abroad impacted on domestic bond yields.