Is stagflation here? The ISM Manufacturing PMI fell -0.5 points to 50.3 in February, below expectations of 50.9. New orders tumbled a whopping -6.5 points, into contraction territory of 48.6, highlighting a dismal outlook for the manufacturing sector. The employment index fell 2.7 points, to 47.6, also contracting Concerningly, prices paid spiked 7.2 points, to 62.4, the highest since June 2022. Weakening economic activity with rising prices is the worst-case scenario for the Fed. The economy is shifting.