Someone Gave Mark Levine a Bad Memo on Israel Bonds

Zohran Mamdani has wanted New York City out of Israel bonds for good since before he was elected, and last week he got most of it, courtesy of an analysis that someone in the comptroller’s office handed Mark Levine. Mr. Levine told the New York Times that the city will not buy Israel bonds “right now,” citing “some technical challenges” and “financial considerations.” The mayor welcomed the decision. The only thing standing between his permanent policy and Mr. Levine’s temporary one is the comptroller’s word that the review is still open. So hold him to it. Because the financial evidence has moved in favor of Israel bonds since Levine made his promise, not against them. Whatever briefing led him to the opposite conclusion deserves another look.

On a primary debate stage in June 2025 Levine told voters that a globally diversified portfolio “should include investments in Israel and Israel Bonds, which have paid solid dividends for 75 years,” and that New York was “now the only pension fund in America without that investment.” He said it again as comptroller in April 2026: Israel bonds “have never missed a payment in 70 years, ever, not once.” Now, ten months into the job, he has reversed course, and to his credit he has not pretended otherwise. “I always said this would be based on financial considerations only, not politics,” he told the Times. “That’s still my position.”

Good. Then let’s run his test.

The sentence that locates the problem came in the same interview. Asked why he made the promise, Mr. Levine said: “Perhaps a year and a half ago, I would have expected that the ratings would have been improved by now and/or that the interest rate would have gone up.”

The interest rate went up. In June 2025, the month he was saying all this on a debate stage, a two-year Israel bond paid 4.2 percent and a three-year paid about 4.5. In the sales period that opened last Thursday they pay 5.04 and 5.52. The bonds did the one thing he said he was waiting for them to do, yet whoever wrote his memo left that out.

Now let's discuss the credit ratings, since Levine brought them up. Not one of the three agencies has moved Israel’s rating since he made the promise. What moved was the outlooks, and they moved in a way favorable to Israel.

S&P took Israel from negative to stable last November and reaffirmed it in May, writing that the economy’s resilience to security shocks “has been remarkable.” Moody’s went from negative to stable in January and left it there in July. Fitch kept its negative outlook in March and said why: it “reflects a fractious domestic political environment that may hinder fiscal consolidation.” That is a complaint about the Knesset’s budget discipline, which is a hazard a New York City comptroller is unusually well placed to forgive. In the same release Fitch wrote that Israel’s military operations had “somewhat diminished geopolitical risks to the ratings.” Three investment-grade ratings, two stable outlooks, and one negative outlook about Israeli budget politics. Any briefing Mr. Levine received that ignores those developments would leave a comptroller with half the numbers.

The market says the same thing in fewer words. On May 25 the Bank of Israel, which is not in the business of selling Israel bonds, reported that the country’s risk premium, the price investors charge to hold its debt, had “declined to near its level from before October 7, 2023.” Whoever briefed the comptroller on Israel’s risk stopped the clock somewhere in 2024.

His office’s other argument is that the city holds bonds paying less than Israel’s, such as Treasuries, because they are safer and can be turned into cash quickly. Liquidity is a real consideration on a short-term desk, and we will not pretend otherwise. But the city bought its first Israel bonds in 1974 and held them on exactly those terms, non-tradable and to maturity, under every comptroller from Harrison Goldin to Scott Stringer, until Brad Lander let the last $40 million run off in January 2023. Forty-nine years and every payment on time.

That leaves the “technical challenges,” which nobody could identify last week on Wednesday and Mr. Levine identified on Thursday: a rule his predecessor adopted for the comptroller’s short-term investment desk. So the obstacle is a rule, written by the previous comptroller, governing the current comptroller’s own desk, enforced by no one but the comptroller. As obstacles go it has the structural integrity of a note a man leaves himself on the refrigerator. Run the substitution test. Had Mr. Lander written a rule that happened to exclude only the bonds of Ireland, nobody would say his successor’s hands were tied. They would say he had a pen.

The mayor’s argument is a different one and deserves a direct answer. “We don’t purchase the bonds of any other sovereign nation,” Mr. Mamdani said. “I don’t think that we should make an exception when it comes to Israel.”

The comptroller’s own holdings data says otherwise. On June 30, 2025, four of the five city pension funds held Italian government bonds, the Police fund held bonds of Mexico and Chile, and three funds held paper from the Province of Buenos Aires. Roughly $7 million in other nations’ debt, which is small, except that the mayor’s sentence was not about size.

Albany reads the same rating reports. Tom DiNapoli’s office told the New York Jewish Week last week that Israel bonds “continue to be a part of our fixed income portfolio,” and his spokesman told the Post that the state’s $310 billion fund continues “to look for investment opportunities in Israel and globally.” Two comptrollers had the same numbers available this year and reached opposite conclusions. Whatever Mr. Levine was shown, his public explanation leaves out the developments that strengthen the case he once made himself.

To be clear, $40 million in a $326 billion system moves nothing in Jerusalem and little in New York. The sum is not the point. The mayor has asked for a permanent end, the activists have declared a victory, and the comptroller’s “right now” is the only thing keeping the decision temporary. Mr. Levine says the review is ongoing. Then it should use this month’s numbers instead of last year’s, it should begin with his own sentence to the Times, that he expected the rate to go up, and it should not be left to whoever supplied last year’s.

He made the promise on the merits in June 2025, and the merits improved. The rule in his way is his own to rewrite. The people who took him at his word would rather see him correct the memo than defend it.