MSCI’s gauge of stocks across the globe fell 0.42%, the European STOXX 600 index closed down 0.62%, the DJIA closed flat, the S&P 500 lost 0.19% and the Nasdaq Composite dropped 0.51%

World stocks slid further and Treasury yields dipped on Wednesday as U.S. worker productivity data beat forecasts but extended a weak trend, further muddying a debate on how far and how fast U.S. interest rates will rise.

Third quarter productivity rebounded at a slightly faster pace than initially thought. Economists said the reading pointed to elevated labour costs and inflation staying high, adding pressure on the Federal Reserve to keep raising rates.

But benchmark U.S. yields and the dollar both fell, suggesting lower rates ahead.

Slower rate hikes have been the trend globally of late, but the Fed remains a wild card. Overall, it’s a fickle, anxious market ahead of next week’s Fed meeting, said Joe Manimbo, senior market analyst at Convera in Washington.

The S&P 500 and Nasdaq fell, adding to the prior day’s sell-off on warnings by three major U.S. banks of a looming recession. Questions about how sticky inflation might be have raised uncertainty about the Fed’s policy path as the pace of future inflation remains unknown.

Looking back in previous decades of high levels of inflation, it usually takes a few years for inflation to moderate, said Chris Dyer, director of global equity at Eaton Vance in London.

MSCI’s gauge of stocks across the globe fell 0.42%, while the broad European STOXX 600 index closed down 0.62% to mark its fourth straight decline as fears of a global recession intensified.

On Wall Street, the Dow Jones Industrial Average closed flat, while the S&P 500 lost 0.19% and the Nasdaq Composite dropped 0.51%.

Many in the market believe inflation is moderating and bond yields have peaked, allowing central banks to begin slowing rate hikes when policy-makers from the Fed, Bank of England and European Central Bank meet next week.

Fed Chair Jerome Powell has warned the fight against inflation is far from over, but late last month he said the Fed could ease the pace of its rate hikes as soon as December.

Powell’s comments have led the market to price in a lower peak interest rate, which Fed funds futures showed on Wednesday to be 4.918% next May, down from recent highs above 5.1%. Futures show the terminal rate at 4.419% in December 2023.

The yield on benchmark 10-year Treasury notes fell 9.2 basis points to an almost three-month low of 3.421%. But the inversion of two- and 10-year note yields, a recession harbinger, deepened at -84.5 basis points.