Inflation is coming in surprisingly weak despite an oil price spike, and that's a bad sign that the economy is fragile, not healthy.

• Oil jumped during the Middle East conflict, which normally pushes prices up across gas, goods, and wages.
• Instead, core inflation went flat to slightly negative — the first month-to-month drop since 2020 and 2008.
• Producer prices also came in negative and below expectations, another sign of a weakening economy.
• The Fed is now expected to pause, and a rate cut looks more likely than a rate hike.
• The last two times prices behaved like this were the 2008 crash and the 2020 lockdowns — both terrible for the economy.

Outlook: This points to a high-risk economy that could tip into a recession or credit crunch, with a Fed rate cut likely before any hike.