Unemployment figures today revealed joblessness fell below 5% in the three months to December.
Stats NZ data showed a drop in the seasonally adjusted unemployment rate from 5.3% to 4.9%.
The surprise figures were enough for ANZ chief economist Sharon Zollner to abandon her prediction of another OCR cut.
Zollner said: "We no longer expect the RBNZ to cut the OCR again this cycle." She added: "We are inclined to take this at face value and conclude that conditions are unambiguously better than previously feared."
The ANZ economist said the Reserve Bank could be more "patient" in its approach, and predicted an expansionary stance from the central bank.
"The RBNZ’s employment and inflation mandates are now looking more achievable, with the economy better placed to weather headwinds than previously feared," she added.
BNZ economists went one step further, and predicted the next move for interest rates would be up.
Head of research Stephen Toplis said: "We have been warning for some time that the scene was being set for the next move in interest rates to be up. Indeed, we abandoned the prospect of sub 0.25% rates back in early November last year. As relatively hawkish as we were, we were not prepared to be definitive that rates would rise. Now we are."
The bank made a bold prediction that rates would begin to rise again in May next year.
"There is still massive uncertainty as to when and by how much but, today, we are formally building in a first rate hike in May 2022," the BNZ team added.
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