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By JBizNews Desk | May 6, 2026

A word that has been largely absent from economic discussions for decades is making a sudden and uncomfortable return: stagflation.

As oil prices surge and growth expectations weaken, economists are increasingly warning that the U.S. may be entering — or already approaching — a period defined by the toxic combination of rising inflation and slowing economic activity.

The shift in sentiment has been driven largely by the escalation of the Iran conflict, which has disrupted energy markets and pushed crude prices sharply higher. The result is a renewed inflationary shock hitting an economy that was already showing signs of cooling.

The Organisation for Economic Co-operation and Development (OECD) now projects U.S. inflation could reach as high as 4.2% in 2026, significantly above earlier forecasts. At the start of the year, most economists expected inflation to remain closer to 2.5% while growth held near 2.5%. That outlook has changed dramatically.

“I think the damage has already been done,” said Mark Zandi, Chief Economist at Moody’s Analytics, pointing to the surge in oil prices as a key driver. “There’s no going back on oil prices in the near term.”

Energy costs act as a multiplier across the economy, raising prices for transportation, manufacturing, and consumer goods. As those costs rise, businesses face pressure on margins, while consumers see their purchasing power eroded.

At the same time, growth is showing signs of strain. Higher borrowing costs, supply chain disruptions, and uncertainty tied to geopolitical developments are weighing on business investment and consumer confidence.

That combination — rising prices and slowing growth — is the defining characteristic of stagflation.

Scott Lincicome, Vice President of General Economics at the Cato Institute, warned that inflation measures closely watched by the Federal Reserve could climb further. “We could see the Fed’s preferred gauge pushing toward 4%,” he said, adding that consumers are unlikely to see relief in the near term.

The Council on Foreign Relations has also highlighted the risk, noting that prolonged disruptions to oil and gas infrastructure could have lasting effects on global supply, keeping prices elevated and growth subdued.

Still, not all economists agree that stagflation is inevitable.

Aditya Bhave, Senior U.S. Economist at Bank of America, said markets may be overreacting to early signals. “You need sustained weakness in demand alongside persistent inflation,” he said, noting that consumer spending data has not yet shown a sharp decline.

The debate ultimately centers on duration. If the energy shock proves temporary, the economy may absorb the impact without entering a prolonged period of stagnation. If disruptions persist, the risks increase significantly.

For policymakers, the challenge is acute. The Federal Reserve is tasked with controlling inflation while supporting employment — goals that can come into direct conflict during stagflationary conditions.

“Central banks have very few good options in this environment,” said Diane Swonk, noting that raising rates to fight inflation can further slow growth, while cutting rates risks fueling price increases.

For consumers, the effects are more immediate. Rising fuel costs, higher food prices, and elevated borrowing rates combine to squeeze household budgets, even if employment remains relatively stable.

Looking ahead, much will depend on developments in global energy markets. The Strait of Hormuz, a key transit point for oil shipments, remains a focal point for traders and policymakers alike. Any disruption there could intensify inflation pressures further.

For now, the resurgence of stagflation concerns reflects a broader shift in the economic landscape — one where global events are once again shaping domestic outcomes in powerful and unpredictable ways.

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London — May 4, 2026 — The Bank of England is considering putting the digital pound project on ice, according to people familiar with the situation, as officials weigh a slower path forward while rival central banks race ahead with their own central bank digital currencies. Rather than a firm decision to approve or scrap the so-called Britcoin this summer, UK authorities are leaning toward a middle route that would slow progress on the CBDC, Bloomberg reported.

The shift marks a notable change in tone. Just three years ago, the Bank of England and HM Treasury said a digital pound was “likely to be needed.” Now the future of the project hangs in the balance as the current design phase runs through 2026, with a final decision on next steps still pending.

The economic stakes are significant. A full-speed digital pound was seen as a way for the UK to maintain competitiveness in digital payments and reduce reliance on private stablecoins and foreign payment systems. Delaying or slowing the project could leave British firms and consumers at a disadvantage as China’s e-CNY continues to expand and the European Central Bank advances its digital euro toward a potential 2029 launch. Analysts warn that hesitation could slow innovation in cross-border payments, limit the Bank of England’s ability to respond to future financial stability challenges, and reduce the UK’s influence in shaping global digital currency standards.

People familiar with the situation told Bloomberg that officials are now prioritizing a more cautious “wait-and-see” approach, evaluating whether a digital pound is truly necessary at this stage amid rapid private-sector developments in stablecoins and other digital payment innovations. The Bank of England has repeatedly stressed that no decision has been made on whether to introduce a digital pound, and any launch would require primary legislation passed by Parliament.

The ruling comes as global CBDC momentum accelerates elsewhere. China’s e-CNY has processed nearly $1 trillion in transactions and continues to evolve, while the European Central Bank is making steady progress on its digital euro with high-level political support across EU member states. The Bank of England’s more measured stance reflects growing concerns about privacy, financial stability risks, and the potential impact on commercial bank deposits — issues that have been central to the design phase work.

For the UK economy, the decision carries broad implications. A digital pound was intended to sit alongside cash and bank deposits as a new form of public money, potentially boosting efficiency in payments and supporting monetary policy in a digital era. Slowing the project could delay these benefits while increasing reliance on private-sector solutions that may not offer the same level of resilience or public trust. Economists note that the UK’s hesitation could also affect investment in related fintech infrastructure and the country’s attractiveness as a hub for digital finance innovation.

The Bank of England and HM Treasury are expected to complete their blueprint and assessment later this year, which will inform the next steps. In the meantime, the pause allows more time to study real-world use cases through the Digital Pound Lab and to monitor international developments.

The ruling underscores a broader global tension in CBDC development: balancing innovation and competitiveness against risks to financial stability, privacy, and the traditional banking system. As rivals push forward, the Bank of England’s cautious approach highlights the complex trade-offs facing central banks in the AI and digital payments era.

JbizNews- Desk – Central Banking

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By JBizNews Desk | Monday May 4, 2026

GameStop has made an unsolicited $56 billion offer to acquire eBay, the online marketplace giant, in what would rank as one of the most stunning corporate takeover attempts in recent retail history — and a dramatic signal that CEO Ryan Cohen is done playing defense.

GameStop has built a roughly 5% stake in eBay and is offering $125 a share in cash and stock, Cohen told the Wall Street Journal in a direct interview Sunday. The offer represents a premium of about 20% to eBay‘s last closing price on Friday. “eBay should be worth — and will be worth — a lot more money,” Cohen said. “I’m thinking about turning eBay into something worth hundreds of billions of dollars.”

GameStop said in a news release that it submitted a non-binding proposal to buy 100% of eBay at $125 per share in cash and stock, split 50/50. The offer also represents a 46% premium to eBay’s closing price on February 4 — the day GameStop first began buying eBay stock. 

The Financing Behind the Bid

The sheer scale of the deal — eBay carries a market value of roughly $46 billion, nearly four times GameStop’s own $12 billion market cap — immediately raised questions about how Cohen plans to pay for it. He has lined up a multi-layered financing structure.

Cohen told the Wall Street Journal that GameStop has secured a commitment letter from TD Bank to provide about $20 billion in debt financing for the deal.  GameStop also holds about $9 billion in cash on its balance sheet.  To bridge the remaining gap, GameStop could seek support from external investors, including Middle Eastern sovereign wealth funds, according to people familiar with the matter. 

In its news release, GameStop said it expects to deliver $2 billion in annualized cost reductions within the first 12 months of closing the deal, including $1.2 billion in cuts from sales and marketing at eBay, $300 million from product development, and $500 million from general and administrative expenses. Cohen would become CEO of the combined company. 

Markets React

The news sent both stocks sharply higher. GME shares jumped more than 9% in after-hours trading, while eBay shares climbed between 10% and 15%, in a market reaction that recalled the 2021 short squeeze that briefly made GameStop a Wall Street obsession. 

The deal would combine GameStop’s collectibles expertise and growing cash war chest with eBay’s 130 million active buyers and global payments infrastructure — a combination Cohen argues could directly challenge Amazon’s dominance in the broader marketplace economy.

Cohen’s Expansion Play

The bid is the clearest expression yet of a strategic pivot Cohen has been building toward since early 2026. In January 2026, Cohen told the Wall Street Journal he was actively scouting deal targets in the consumer and retail sector as part of a plan to scale GameStop far beyond video games and collectibles.  His compensation package reinforces the ambition: it includes a performance-based stock option award valued at roughly $35 billion if fully earned, structured in nine tranches tied to escalating milestones, with the most demanding targets requiring GameStop to reach a $100 billion market cap. 

What Happens If eBay Says No

Cohen said he is prepared to run a proxy fight and take the offer directly to eBay shareholders if eBay’s board is not receptive. “There is nobody who is more qualified, based on my experience, to run the eBay business,” he told the WSJ. 

eBay had not responded to requests for comment as of Sunday evening. GameStop, eBay and TD Bank did not immediately respond to Reuters’ requests for comment.  Whether eBay’s board engages or resists, the proposal has already reshaped how Wall Street thinks about both companies — and about what Ryan Cohen is actually building.

— JBizNews Desk

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