The Reserve Bank of New Zealand (RBNZ) will announce on Wednesday afternoon whether it believes it has seen enough data to warrant reductions to the oppressive 5.5 percent OCR.
At 70 percent, markets have priced in a better-than-not chance of a cut, which would be the first downwards movement in over four years.
Local economists believe a cut will happen either this week or at the next meeting in October.
"An August OCR cut is very much live. We expect a cut in October if not before," Mark Smith, ASB senior economist said, a view also held by ANZ and Westpac economists.
The widespread predictions of imminent rate cuts are enough to give mortgage-holders whiplash.
In May, the RBNZ published tracking showing an OCR cut wasn't expected until late 2025, with governor Adrian Orr dismissing suggestions he was bluffing.
With the benefit of three months of data, particularly showing headline inflation at 3.3 percent, just outside the target band of one to three percent, the RBNZ could be motivated to shift.
Kiwibank chief economist Jarrod Kerr predicted "a few sprained ankles" at the central bank given its pivot from hawk to dove.
"Overly restrictive monetary policy has inflicted much pain and tamed the inflation beast," Kerr said.
"Households and businesses are struggling. Almost all data have come out on the weaker side of expectations, and well below RBNZ estimates.
"Unemployment is rising, swiftly, and confidence in the economy remains at recessionary levels."
NZ has suffered a pronounced slowdown since 2022, including a double-dip recession and per capita GDP falling for six consecutive quarters, totalling 4.3 percent.
Unemployment has gradually grown to 4.6 percent, and is forecast to breach five percent in 2024.
"Given what we know we recommend a cut this week, followed by a cut at every meeting until the cash rates hits 2.5 percent," Kerr said.
"We're not convinced the RBNZ will pull the trigger this week. They should."
BNZ Head of Research Stephen Toplis agreed "the economy is in distress".
"The labour market is softening rapidly and will soften much more. Inflation is settling within the RBNZ's target band. This demands an immediate response from the central bank to prevent an overshoot on the downside," he said.
At 5.5 percent - well above Australia's 4.35 percent - NZ's OCR is at its highest level since 2008.
The RBNZ hiked from pandemic emergency lows of 0.25 percent to 5.5 percent between 2021 and 2023, where it has sat for 15 months.
