More still needs to be done to bring inflation under control despite the Official Cash Rate (OCR) being hiked, some commentators say.
The OCR on Wednesday increased by 0.25 percent to 1 percent - a move that some economists are saying is not aggressive enough.
Economic Forum chairman and former Finance Minister Steven Joyce told AM loose monetary policy by Reserve Banks all over the world during the early stages of the pandemic were a big risk.
"I think central banks all over the world will have to look at themselves - early on [in the pandemic] they committed to being in loose monetary policy for a very long time and it's taken them a long way to climb down and it was evident at least a year ago that they were stoking inflation."
Given the rising inflation, Joyce said the Government should rein in its spending.
"They are still spraying the money around, as people say, and that's actually going to be challenging for the Reserve Bank in New Zealand and it's challenging in the US as well.
"What happened in the US is Donald Trump sprayed a lot of money around early on in the pandemic and then [Joe] Biden came in and did a whole lot more, and some of that was political one-up-manship which is fine - but it's going to have quite an impact on the economy.
"There's no free lunch in economies - if you go too far in one direction then you will get caught and you will have to pay in another way, and the bill in this case is very high inflation.
"I think there's no argument that there should have been [the] support for, particularly, those people in businesses affected by the pandemic… it's a lot of the other money that was spent that you could probably put a few question-marks over."
Infometrics principal economist Brad Olsen said on Wednesday the 0.25 percent hike was "disappointing" and not aggressive enough.
But Milford Asset Management investment analyst Katlyn Parker said while the hike didn't seem like a lot, she noted the Reserve Bank's (RBNZ) indications that more aggressive hikes were to come. The Reserve Bank said on Wednesday its forecasts show the OCR will move up to about 3 to 3.5 percent towards the end of 2024.
"If you look beneath the surface, the RBNZ was actually a lot more aggressive than the headline presented," Parker told AM. "For example, they forecast the peak interest rate to be a lot higher than they previously did.
"Also, there's clear confidence… about the pathway that they are going to take."
Having adjusted its peak inflation forecast to 6.6 percent (up from 5.7 percent last quarter), the RBNZ acknowledged on Wednesday inflation was going to go higher - and stay there for longer.