ANZ's chief economist, Sharon Zollner, is now forecasting 25 basis point increases in February and April, taking the official cash (OCR) rate to 6 percent.
"The RBNZ [Reserve Bank of New Zealand] warned in November that if inflation pressures were to be stronger than anticipated, the OCR would likely need to increase further.
"Data since then has been a series of small but pretty consistent surprises in that direction."
She said headline inflation had eased but core domestic inflation had been tracking sideways, and business surveys showed firms still inclined to raise their prices.
A further complication has been the fall in wholesale interest rates as financial markets have priced in the chances of rates cuts by central banks.
Those declines have been countering the effect of the RBNZ's 525 basis points of OCR rises between October 2021 and May last year.
"Policy is 'running to stand still' in that context," Zollner said.
She said the risks were balanced and if the RBNZ did not hike at the first meeting of the year on 28 February, then they would in April unless there was "meaningful downside surprises".
"On the other hand, risks are tilted towards cuts coming earlier than February 2025, given we think restarting hiking will have pretty powerful shock value, as it's been widely expected that rates have peaked."
The RBNZ's November monetary policy statement signalled rate cuts from early 2025, but financial markets have been pricing in rates cuts as early as April this year, although the bulk of opinion is now around August and November.
Zollner said the RBNZ has a single focus, to get inflation back inside the 1-3 percent target band.
"At the end of the day, they have a job to do: to get inflation sustainably down to 2 percent in the medium term.
"We just don't think the RBNZ committee will feel confident that they've done enough to meet their inflation mandate. The buck stops there."