European Central Bank vice-president Luis de Guindos acknowledged on Wednesday that the ECB's policymakers are still in restrictive territory on rates.
The official noted that the disinflationary process has been quite profound with all measures of underlying inflation going the same way, but warned that services inflation is the main risk factor for overall price growth.
De Guindos also said that he thinks that the euro area's inflation over the next 6-7 months will be bumpy but noted that there is a lot of confidence that inflation will converge to 2% and the wage catchup process will be finalised next quarter.
In addition, the ECB's president revealed that the ECB's policymakers do not have a determined rate path for the next 6 months. He highlighted that the ECB needs to move very slowly with lots of prudence as the level of uncertainty is huge.