Why is my fuel pressure gauge shacking?

A mechanical pump builds pressure from the internal spring, pumps up pressure, and for a second/ few seconds after the needles seat, the pump are "floats" and the pressure should be VERY even.

I would guess you have dirt in the pump valves, or in the regulator that is allowing some leak--back.

You run an electric before the mechanical? Might try bypassing the mechical and see if this changes.