The European Central Bank is in the final leg of its historic cycle of interest-rate increases, according to Vice President Luis de Guindos.

“We have now entered the home stretch of our monetary policy tightening path,” Guindos told Il Sole 24 Ore. “And that’s why we are returning to normality, to 25 basis-point steps.”

The ECB has raised borrowing costs by 375 basis points since July as it seeks to tame inflation, though it slowed this month’s rate hike to a quarter point. While markets anticipate two more moves of that size in June and July, some officials are starting to accept that more may be needed beyond that, according to people familiar with the debate.

Guindos reiterated the official ECB stance that possible future steps will depend on data and be decided on a meeting-by-meeting basis.

All decisions will be “based on the evidence of how the tightening of financing conditions has worked — and on the path of inflation, headline and core,” he said, adding that he’s “concerned about service prices, which account for a large share of core inflation.”

Guindos also said:

• Quantitative tightening “has led to an increase of 60-70 basis points in ten-year government bond yields”
• “I expect that, for the June tranche, banks — even those that have made most use of the TLTROs — will not have any trouble rebuilding this liquidity”