Last week market expectations for New Zealand interest rates shifted sharply. It now looks like a two-horse race over the next couple of months between our Reserve Bank and Norway’s Norges Bank as to who will be the first developed market central bank to hike rates in a post-COVID world. In contrast, earlier this month, the Reserve Bank of Australia reiterated its “central scenario” remains that it doesn’t expect to hike rates until 2024, while the United States Federal Reserve’s projections are it will commence with hikes in 2023. How has New Zealand found itself at the head of the pack to tighten monetary policy?