BNZ senior economist Craig Ebert said that, not for the first time, BNZ economists found themselves torn between what they thought the Reserve Bank should do and what they thought they would get.
''We still do not believe there is enough to gain from lowering interest rates to compensate for the potential costs of doing so. But if the bank is to start rebuilding confidence that it can be consistent between meetings, it really has no choice but to lower its OCR next Thursday.''
A cut remains the BNZ's expectation, along with the view the central bank sustains its easing bias while also setting the hurdle for any further reduction at a high level - much as the Reserve Bank of Australia had recently done, he said.
It was important not to forget data being released over the next period, culminating in the third quarter gross domestic product figures on December 17.
The Government's fiscal update on December 15 could also involve some interesting fiscal policy announcements, The balance of payments figures would be released on December 16.
ASB senior economist Jane Turner expected a cut in the OCR to 2.5%, largely due to the recent lift in the trade-weighted index - the basket of currencies from New Zealand's largest trading partners.
Since the June Monetary Policy Statement, the Reserve Bank had cut the OCR by 0.75% from 3.5% to 2.75%. At the last MPS, the central bank's 90-day rate track implied one further cut.
''In our view, the lift in the TWI since the September Monetary Policy Statement means a rate cut in December should be a done deal.''
Beyond the December decision, Ms Turner believed the medium-term inflation outlook was likely to be weaker than the Reserve Bank expected in September.
As a result, along with December's rate cut, the Reserve Bank was likely to cut further mid-2016, taking the OCR to a low of 2%.
The Reserve Bank was relying too heavily on the lower New Zealand dollar to deliver inflation back to its target of between 1% and 2%, she said.
ASB expected the pass-through from the lower dollar to inflation would be more muted. In addition, the labour market was likely to be weaker than the central bank was expecting and that would keep domestic inflation subdued for longer without further cuts.
''We also view the neutral interest rate as likely to be lower than where the Reserve Bank currently thinks it is. The balance of risks to inflation is all to the downside. In our view, being stingy on rate cuts when inflation remains so subdued is a risky strategy.''
Federal Reserve chairwoman Janet Yellen said she was looking forward to a United States interest rate rise which is seen as a testament to the economy's recovery from recession.
Craigs Investment Partners broker Chris Timms said Dr Yellen did not indicate if she still expected the rate hike would be warranted at the Fed's last remaining policy meeting this year on December 15-16.
The Reserve Bank of New Zealand is expected to lower its official cash rate on Thursday to 2.5%. The Reserve Bank of Australia last week held its official lending rate at 2% and the European Central Bank cut its deposit rates further into negative territory.
Dr Yellen expressed confidence in the US economy and said job growth through October suggested the labour market was still healing, although it was not near at full strength.
''She also reaffirmed her view the drag from abroad on US economic growth and inflation will start to moderate next year,''Mr Timms said.
Already, Dr Yellen saw risks from abroad having dissipated since the northern hemisphere summer.
Investors were already betting the Fed would lift its benchmark federal funds rate from zero to 0.25% - the first rise in nine years. And economists were picking a rise in December, he said.
Following the release of Dr Yellen's remarks, the US dollar strengthened, indicating more confidence higher interest rates were on the way.
