A good central banker is one willing to make unpopular decisions for our own good.
Tasked with keeping prices stable, hopefully without choking the economy, a well-timed interest rate hike is, as the saying goes, like taking away the punchbowl just as the party is really getting going.
This year the Reserve Bank faces an even more unpleasant task: raising interest rates when the party is not only over, the hangover is kicking in.
The economy is clearly overheating. Thursday's inflation figures remove any doubt about that, as the consumer price index hit a 31-year high of 5.9 per cent.
While a large part of the inflation problem is global, which neither the central bank nor the Government can do much about, it is becoming less so by the day.
Imported inflation, known as tradable inflation, was 6.9 per cent in 2021, but was actually below expectations. Domestic inflation (non-tradable), meanwhile, at 5.3 per cent, is lower, but it is rising quickly, and more quickly than expected.
"The biggest surprise in today's data was how much of the inflation pressure is now coming from the domestic economy," ANZ wrote.
Once domestic inflation gets going, it may be hard to stop. Workers who this week read that they need a 5.9 per cent pay increase just to maintain their spending power, will next week read (probably) that unemployment has fallen to about 3.5 per cent.
This comes at a time when Covid is hitting productivity, creating a vicious cycle for employers. Not only are they likely to be getting less output from each worker, they will soon face demands from workers (with considerable justification) for hefty pay increases, or they will quit.
If employers pay up, they will also need to pass on price increases, and the inflation spiral continues.
Meanwhile, the housing market is already showing signs of a marked slowdown, with observers increasingly warning there could be a material fall in prices.
Usually the housing market is seen as so crucial to New Zealand's consumer confidence (and political fortunes) that the first sign of a downturn would precipitate a sharp response from policy makers.
In 2020, the Reserve Bank slashed interest rates close to zero and pumped tens of billions of dollars into the financial system to maintain prices.
While those measures were not explicitly about the housing market, governor Adrian Orr described rising house prices as a "first class problem".
In 2022, however, the Reserve Bank looks likely to have to hike interest rates repeatedly even if house prices are falling and the effective pay of workers is falling.