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Today's decision leaves open the question as to what will constitute the bottom – or "terminal rate" – for the OCR. 

Capital Economics said that at face value, the announcement would imply a terminal rate of 2.75%, which is broadly in line with what the analyst consensus and markets are anticipating.

"However, we continue to believe that the bank is understating the downside risks to activity and inflation.

"As a result, we’re sticking to our forecast that the RBNZ will eventually cut rates to a low of 2.5%."

The record of the Monetary Policy Committee meeting showed the on-hold decision was the consensus view, implying a unanimous vote. 

However, a 25bps cut was also considered, given concerns over the activity backdrop in recent months and over the potential for excess caution by households and businesses in the face of economic uncertainty.

ANZ economists said they continued to expect a 25bps cut to the OCR in August.

"We do see some upside risk to the RBNZ’s May forecast for non-tradeable inflation in Q2, but over the coming months we are forecasting lower consumption, a cooler housing market and softer medium-term inflation, and thus more OCR cuts to come."

Westpac head of strategy Imre Speizer said while the Reserve Bank indicated further easing, it had given no clues on the timing.

"This was slightly less dovish than the markets had expected, the reactions so far reflecting that."

Kiwibank chief economist Jarrod Kerr, who favoured a cut, said it was a "no fun" announcement from the Reserve Bank.

"In terms of official rates, the market is much closer to the bottom," Kerr said.

"They have already delivered 225 pips [in cuts] and that’s still feeding through.

"The good message here is that rate relief has been provided. We’re arguing that they need to provide more and some are arguing that they need to provide less.

"The main message is that rates have already fallen quite substantially and I think there’s still a little bit more to go."

Cotality chief property economist Kelvin Davidson said the housing market effects from today's OCR decision were "likely to be negligible".

"Mortgage rates have already fallen a long way from their peak – and by a similar amount to the OCR – and we’re recently seeing in the data that a higher proportion of borrowers are now looking at longer-term fixed rates again, after a period of going short as market rates fell."

Davidson said even if there was another round of cuts by the banks, the scale would be smaller than the falls in mortgages already seen.

He said the greater focus for the housing market at the moment was on the other side of the ledger – that a large number of listings and labour-market uncertainty were keeping a check on prices.

"Those concerns about job security might mean that many existing borrowers who are rolling off higher fixes from the past and down on to the new prevailing rates might choose to save their extra cash rather than spend it in the economy or property market. All in all, the second half of the year for NZ's housing market may be just as subdued as the first."

Higher export prices and lower interest rates were supporting a recovery in the New Zealand economy but global uncertainty and tariffs were likely to reduce global growth and slow the pace of New Zealand’s economic recovery, the committee said.

"The economic outlook remains highly uncertain," the committee said.

Mortgage and deposit rates had declined and were expected to continue to decline over the coming quarters as more mortgage holders refixed at lower one- and two-year fixed-term rates, the Reserve Bank said in its statement.

"Close to half the stock of mortgages is due to reprice during the September and December 2025 quarters."

Willis said the Government would continue taking steps to ease the cost of living, including by trying to promote more competition in the grocery sector, looking into capping local government rates rises, and providing parents with more support via Family Boost.

The market had given an outside chance of a cut from the Reserve Bank.

“The currency popped a bit higher on the OCR decision, but moves were modest, and it’s now starting to gradually fade as the market takes into account that the bank has put in place an easing bias on their assessment,” ASB senior economist Mark Smith said.

Finance Minister Nicola Willis said that despite global uncertainty, New Zealand was continuing its economic recovery.

She said her Government had been on a mission to ensure its spending didn't exacerbate inflation.

Asked whether there was room for her to cut spending more, she said he had chosen a "gradual course" to put a lid on government spending.

Willis said the level of spending the Government is currently doing is not putting upward pressure on inflation.