The Federal Reserve is hoping to slow its interest rate hikes and give Americans some relief from rising mortgage and car payments. A crucial inflation report could make or break those plans.

The Labor Department is set to release new consumer price index (CPI) data for November on Tuesday, a day before the Fed is expected to increase rates for the final time this year. While the CPI isn’t the Fed’s preferred way of tracking inflation, officials still play close attention to the report and its powerful influence over financial markets and business leaders.

Most economists expect the annual inflation rate to fall to 7.3 percent as of November, according to consensus estimates, with prices growing by 0.3 percent last month alone. October’s rate was 7.7 percent.

While inflation would still be high if those expectations pan out, it would at least show signs of slowing down, thanks largely to the steep decline in gas prices from the first half of the year. The Fed’s efforts to put the brakes on the housing market through higher home payments are also yielding results.

“The oil prices are a really big, big improvement, and we’re seeing a significant slowdown in mortgage purchasing and a little bit of softening in rents, which is good,” said Karen Shaw Petrou, managing partner at research firm Federal Financial Analytics, in a Monday interview.

“But then you look at other key sectors like food, health and consumer goods and inflation is still rip-roaring away.”

The Fed has raised interest rates at a record-breaking pace to help bring inflation down, attempting to get ahead of rising prices without causing a recession. Fed leaders say they are hoping to increase rates in smaller increments to limit the risk of a recession and could start as soon as Wednesday if those expectations are met. 

“We have a risk management balance to strike. We think slowing down at this point is a good way to balance the risks,” Fed Chairman Jerome Powell said in remarks at the Brookings Institution last month.

Fed watchers predict the bank will raise its baseline interest rate range by 0.5 percentage points this week, breaking a streak of four consecutive 75 basis point hikes beginning in June. Even a higher-than-expected CPI report could keep the Fed on track for a smaller increase, experts say, given the bank’s reluctance to seem like it was caught off-guard.

Raising rates by 75 basis points after hinting toward a slowdown would be “a pretty big step to take when most [Fed officials] have said things look like they might be at a turning point,” said Derek Tang, co-founder and economist at research firm Monetary Policy Analytics, in a Monday interview.

“Is there a situation where they have no choice but to go 75 [basis points] if the inflation print is so bad? Yes, but I think that that bar is pretty high,” he said.

While the Fed is often wary of shifting gears rapidly, the bank has recent history with a major inflation report upending its plans.

The bank had planned to raise rates by 50 basis points in June, until the May CPI report released three days before the eventual rate hike showed prices spiraling far higher than expected. The Fed then issued a surprise 75 basis point bump after financial markets melted down over concerns about its handle on rising prices — the first in a series of four steep increases.

“The Fed is very averse to reneging on definitive forward guidance, and that has been 50 basis points for the last few weeks. That said, it did surprise the markets with the first one of its 75 basis point hikes because the news was a lot worse than it expected,” Petrou said.

“The Fed has a pretty bad, pretty long history of getting the data wrong, and if 50 [basis point] projection is based on data that proves wrong, it’s possible the Fed would go to 75,” she continued.

“But I doubt it.”

Most Fed watchers agree that it would take an exceptionally bad inflation report to force the bank to break its plans. Even so, Tang said any surprising increase in inflation would likely leave Americans dealing with higher interest rates for longer than they may be able to stomach.

Powell and top Fed officials have pledged to keep interest rates at levels meant to restrict the economy until inflation is on its way back down to the bank’s preferred 2 percent annual increase. That means Americans are unlikely to see long-term relief from higher mortgage and credit card rates, all while the strong labor market continues to weaken.

“That’s all part of trying to transition the economy to be less supercharged. But you just want it to get less supercharged, you don’t want to be plunging into a deep recession, and getting that right is very hard,” Tang said.