The Reserve Bank is walking a tight rope with rising interest rates

Governor Adrian Orr's expected to raise the Official Cash Rate by another 50 basis points today -- from 1.5 percent to two-percent.

Kiwibank Chief Economist Jarrod Kerr says it could eventually peak at three-percent.

He says the central bank needs to control inflation, but it can't be too aggressive.

Kerr says the more interest rates rise, the more house prices fall, and the greater the risk of a recession.