FXStreet reports that analysts at Goldman Sachs discuss prospects of the RBNZ policy.

"Q221 labor market report was very strong. In context, the labor market has now returned to conditions comparable to late 2019 which the RBNZ then characterized as "around maximum sustainable employment. On any measure, this recovery to pre-pandemic conditions has been much faster than we and the RBNZ expected".

"In light of this and the RBNZ's comment yesterday that it needs to "think about when and how we would return interest rates to more normal levels", we front-load our forecast tightening cycle to include +25bp hikes in August, October and November 2021 - taking the official cash rate to 1.0% by end-2021 (previously 0.5% by end-2021).”

“This will take the OCR back to the pre-pandemic level of late 2019. We note the risk that the RBNZ hikes by 50bp at the August meeting, although we think a series of back-to-back 25bp hikes is more likely."