It's a delicate juggling act the Reserve Bank has to make — keeping inflation down without dropping the economic ball entirely.
So, how's the juggle going?
Well at the moment inflation — the increase in price we pay for things like food, vehicles and household bills — is running hot at 7.2%, rising at levels not seen in decades.
To bring it back down, the Reserve Bank is pushing up the official cash rate, the interest it charges commercial banks to borrow money.
The idea is that as it goes up, banks will pass the higher cost of borrowing onto consumers.
They will spend less, demand drops, and businesses become more competitive, resulting in lower prices and a drop in inflation.
There are early signs the Reserve Bank's efforts are working, with a slight dip in inflation at the end of last year and house prices falling.
Economists now reckon the Reserve Bank will ease up on the OCR to avoid pushing the economy so hard that it crashes completely.
Yesterday, ANZ chief economist Sharon Zollner said another 25 basis point lift was likely when the Reserve Banks provides its latest update this afternoon.
"If that's not to be, we see a 50bp hike as likelier than a pause," she said.
Her sentiment is reflected across the banks, with Westpac, ASB and Kiwibank all landing their forecasts on a 25 basis point rise.
"Monetary policy is now actively working to slow the economy but it will still be a long and uncomfortable wait until we get back to low and stable inflation," Westpac chief economist Kelly Eckhold said.
"We expect a 25 basis point lift."
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