(Bloomberg) -- Stocks fluctuated on speculation that a hotter-than-expected producer price reading won’t be enough to sway Federal Reserve officials from reducing their pace of rate hikes next week as recently signaled.

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“With traders on edge, any indication that prices remain elevated and that inflation is more sticky than currently believed, is a negative for markets,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “It is likely that the Fed will move ahead with their plans of reducing the rate hike down from 75 bps per meeting to 50 bps per meeting, but if there is any chance of a Santa Claus rally this year, it will hinge on the inflation data next Tuesday coming in lower than expected.”

On the eve of Wednesday’s Fed decision, all eyes will be on consumer inflation figures. US central bankers, including Chair Jerome Powell, have been signaling a slowdown in the pace of rate hikes while stressing borrowing costs will need to keep rising and remain restrictive for some time to beat inflation.

“Month-over-month PPI rising slightly and coming in just over expectations is yet another reminder of how sticky inflation is,” said Mike Loewengart at Morgan Stanley Global Investment Office. “Though keep in mind compared to where we were a year ago, we are in a better place and headed in the right direction. It’s unlikely today’s hotter-than-expected report would be enough to push the Fed to stick with the 75 basis point hikes next week, but any negative news on the inflation front is a thorn in the side of both the Fed and investors.”