• The Fed decided to hold rates steady in October as expected, with two members dissenting.
• The FOMC's main issue is inflation, which has been elevated for years.
• Next year will be the start of a meeting change so that the FOMC can have "strategic deliberations."

The second-to-last Federal Open Market Committee meeting in 2026 has come and gone, with some new information unveiled at Chair Kevin Warsh's press conference.

The FOMC decided in its meeting to hold interest rates steady on Wednesday, although two members dissented.

That comes as the inflation rate has been above the Fed's 2% target, while unemployment remains low. Warsh also announced a shake-up to next year's FOMC meeting plans.

Here are three large takeaways from Wednesday's Fed meeting.

Two dissents

While last month's 25-basis-point hike was a unanimous 12-0 decision, the October vote to hold rates steady was 10-2. Lisa Cook and Beth Hammack wanted to hike rates by 25 basis points again.

"The skew is toward tightening, and today's decision reads as a disagreement over timing rather than over destination," Jason Pride, chief of investment strategy and research at Glenmede, said in commentary.

Inflation remains a problem

Warsh detailed some positives about the employment side of the dual mandate, including low four-week moving average unemployment claims, a lower jobless rate than a year prior, and better job growth than last year.

Meanwhile, the other side of the dual mandate, price stability, is more of a concern. Inflation has remained above the Fed's 2% target. The Fed hiked rates in September to try to help that. Warsh said at Wednesday's press conference that the FOMC's discussion has been largely focused on price stability.

"Energy and related prices have moved higher again in recent weeks," he said. "And our job is to ensure that relative price changes in some sectors do not broaden out across the economy and that inflation expectations remain as they are anchored."

Warsh said quashing inflation isn't about a fixed date on a calendar nor an isolated data point.

"If it were about those two things, this job would be easier, and we wouldn't be suffering from nearly six years of inflation above target," he said.

Meeting switchup

Next fall will look different. Warsh announced at the FOMC press conference that there will still be eight meetings next year, as usual, but one of them will "focus exclusively on broad monetary policy strategy with neither a vote on the federal funds rate nor a policy statement anticipated." He expects that in 2028, two of those meetings will be like this.

"A change to the Fed's meeting schedule is significant. That is a dollar killer," Juan Perez, senior director of trading at Monex USA, said in commentary. "Less information is a big problem for forward guidance. It also seems like an admission from the Fed that the economy is not firing on all cylinders."

Warsh said the change was discussed over a couple of meetings, and the reason behind making it is because it's important to have time and space to make "strategic deliberations," looking over longer time horizons, and thinking through large questions.

"It's yet another change to get the conduct of monetary policy on the right track," he said.

The committee is scheduled to meet once more before the year ends in December, which means they will have a slew of economic data to help make their last decision. Traders expect a rate hike to be the likely outcome of that last meeting.

• As expected, the Federal Reserve held rates steady on Wednesday.
• Fed Chair Kevin Warsh said the Fed is working toward price stability and lower inflation.
• Smart people in business and finance expected the hold, and estimate a hike in December.

The Federal Reserve held interest rates steady as was widely expected. The rate remained unchanged after a 10-2 vote, where 2 officials voted to hike rates by 25 bps.

Fed chair Kevin Warsh, who began his term leading the central bank in May, said the Fed is working to deliver future price stability and quash inflation during the Federal Open Market Committee press conference following the hold announcement.

"The period right in front of us is information rich," Warsh said.

He added: "We're going to be able to figure out what's the appropriate protocol, as part of this package that we started to deliver five months ago, to deliver price stability."

In September, the Fed opted for a quarter-point increase — the first hike in three years — aimed at tackling rising inflation. The decision to hold rates comes less than a week before US midterm elections, where the country's affordability crisis and rising energy and oil prices are fresh on voters' minds. Warsh said politics played no role in the decision.

Here is how smart people in business and finance are reacting to the hold — and why many expect another rate hike in December.

Kay Haigh, global head and chief investment officer of fixed income and liquidity solutions at Goldman Sachs Asset Management

Haigh is among the Fed watchers who expect a hike to be the likely outcome of the final Fed meeting of the year.

"We expect the Fed to resume rate hikes in December," Haigh said. "September's strong CPI print is a reminder that upside inflation risks remain, and the Fed is likely to look to take out further insurance."

Steve Rick, chief economist at TruStage

Rick said Wednesday's decision to keep rates steady made sense after September's first hike since July 2023.

"Monetary policy works with long and variable lags, so the Fed will want to see how the higher rates already in the system are affecting consumer spending, business investment and hiring before determining whether additional tightening is necessary," he said. "There's no need to rush."

Andrew Davis, head of investment strategy at Bryn Mawr Trust and a former BLS analyst

Davis said the Fed's wait-and-see approach makes sense as inflation remains above the Fed's 2% target and the job market has cooled without "showing the kind of widespread deterioration we'd typically associate with a recession."

"One thing worth watching is how the bond market responds," Davis said. "The Fed controls short-term interest rates, but longer-term yields reflect a much broader set of forces, including inflation expectations, economic growth and Treasury supply. With the 10-year Treasury yield around 5%, financial conditions have already tightened considerably. Higher borrowing costs can do some of the Fed's work without another rate hike."

Elizabeth Renter, the lead economist at Life360 and a former senior economist at NerdWallet

"The Fed's choice to hold today will have little noticeable impact for everyday household life," she said. "But consumers paying attention could feel let down by the seeming inaction on inflation from the Central Bank."

Renter suggests that families feeling financial strain cut back on discretionary expenses, as prices are likely to remain high. Those not feeling as much strain could put some money into extra savings.

Peter Boockvar, chief investment officer at One Point BFG Wealth Partners

Boockvar said markets would likely be on the lookout for unofficial guidance on rates from central bankers in the days and weeks ahead. Fed Chair Kevin Warsh has leaned away from the central bank issuing official formal guidance. But other Fed officials have been more forthcoming about their views on monetary policy lately, such as by speaking about rates in public remarks.

"I'm sure again Chair Warsh will dance around making any commitment and we'll be more reliant on the upcoming speeches and comments that his colleagues give," Boockvar wrote in a note to clients on Substack.

Seema Shah, chief global strategist at Principal Asset Management

Seema Shah said the hold was a good call. Amid global and economic uncertainty, the Fed has time to gather more data. Yet, she said hikes in December and early 2027 are expected.

"AI may be booming, but the broader economy is not firing on all cylinders, and elevated geopolitical uncertainty argues against rushing another hike," she said. "But the direction of travel remains clear. The Fed is still taking back some of last year's rate cuts, and the two dissents underline that tightening bias."

Brian Coulton, chief economist at Fitch Ratings

Brian Coulton said the Fed is holding steady for more information before "pulling the trigger again." He also expects another hike in December, based on economic factors indicating "upside risks to the US inflation outlook."

"With 2 of the 12 voting members opting for a hike, and a more bullish assessment of current growth trends, it looks like we will get another hike in December," Coulton said. "The statement characterized economic activity as expanding at a 'strong pace' rather than the 'solid pace' description used in September."

As a child, you may have sung along to Toys R Us' iconic jingle about not wanting to grow up. Decades later, many millennial and Gen Z adults are taking that motto seriously.

Adults are rediscovering how Lego, stuffed animals, and other toys brought them joy. Now that they're earning their own money, they can afford the things they once played with or circled in catalogs. Hobby spending — which includes hobby shops, arts and crafts stores, and outdoor recreation providers — rose 7.9% year over year in August, according to an analysis by the Bank of America Institute.

Devin Byron, 25, had a collection of American Girl dolls growing up, but her interest in playing with them fizzled out around middle school. However, her love for them never really went away. And now, working an office job, she can buy her own.

In February, she and her friend went to the American Girl store in New York. Byron purchased the historical doll representing the '60s, Melody, which cost $135 with the book, plus $34 for accessories.

"I feel like a lot of collectors now are, I would say, healing their inner child because some people couldn't get maybe American Girl dolls growing up, but now they can," Byron said. "And it's an adrenaline rush too."

She's not the only adult contributing to the toy economy. Market research company Circana found that adult-only households made up over half of toy sales in the first half of this year, and that overall toy sales for adults increased 25%. Some adults may buy toys to bring nostalgia back into their lives or to avoid doomscrolling. For others, it's to make a profit.

"We're seeing toys increasingly function as hobbies, fandom ecosystems, and social experiences rather than traditional children's products," said Kristen McLean, vice president of client insights for Circana's Entertainment Knowledge Group. "That's expanding the consumer base and creating new opportunities for manufacturers and retailers that understand how to engage collectors, enthusiasts, gifters, and self-purchasers."

The rise of 'kidulting'

Jay Berino, store manager at the Lowry Town Center Timbuk Toys in Denver, pointed to "kidulting," the trend in which adults engage with childlike toys and hobbies, as coming from adults seeking distractions and nostalgia — from buying Pokémon cards to lava lamps.

"As much as we're a toy store and people hear toy store and think of kids, we sell to a lot to full-blown adults, and that drives a huge chunk of our business," he said.

Syls Farmer, 32, runs a vintage online store specializing in toys marketed to girls. Her store, Mema's Doll Shop, was inspired by her grandmother, who ran a couple of toy stores back in the day. Farmer said adults buy from her for themselves or for their kids so they can experience their past.

"A lot of people are dealing with a lot of pressure in this general economy and the world in general," Farmer said. "And I think that these items of childhood are bringing back feelings of comfort and peace that I think a lot of us need right now."

Farmer also buys toys for herself, including her first American Girl doll through Facebook Marketplace — Nicki, one of the '90s-inspired dolls.

Even crafters are getting in on the toy craze: Abby Glassenberg, the president of the Craft Industry Alliance, said that homemade Labubu-esque bag charms have taken off, with crafters making their own customizable charms from crochet or felt.

"People are definitely still spending. I think craft in some ways is resistant to market up and down," Glassenberg said. When the market is up, people pour more money into their hobbies, whether that's getting premium materials or even traveling to somewhere catered to their favorite crafts.

"When the market is down, and people's budgets are tighter, they want to make something for a gift rather than buy it," Glassenberg said.

Collecting toys

Emma Wynn, 28, has 120 Jellycat items, a popular stuffed-toy brand that includes animals, food, and more. Wynn's collection began when she bought a scuba diver egg while browsing at a garden center with her family, sparking a feeling of childlike happiness.

Prices range on the Jellycat site; for instance, a heart dragon is priced at $80, a carrot cake is priced at $45, and bear winter decorations are priced at $28. Wynn funds her collection with money she earns from content creation, rather than from her corporate job.

Wynn thinks adults buy toys because they bring back happy childhood memories, can provide a dopamine hit when someone finds something they've been searching for a while, and can connect them with others who are building similar collections.

"It feels very empowering to be unapologetic about the things that bring us joy and happiness, whereas before maybe I would've been embarrassed about it," she said.

It can also be a tangible way to remember a memory. For instance, Wynn's soon-to-be mother-in-law bought her a Jellycat flower bouquet to celebrate her new engagement.

Fueling an income

Harrison Woodward, 28, said building and playing with Lego sets was a large part of his childhood. For one birthday in his early 20s, his aunt bought him a Lego Porsche car model, reigniting his passion for Lego sets. He put on a streaming show after a long day of work and started to build the over 1,000-piece product.

"It was just the most therapeutic, peaceful activity," he said. "You could sit there for a few hours, a few days in a row, and complete a set and see it come together and marvel at all the different engineering things that they put into these sets now."

He left his job in insurance to focus on content creation full time. He posts about his Lego collection and passion for cars; he recently started collecting Hot Wheels, another childhood favorite. He has spent thousands on Lego and is running out of space in a room that's filled with his collections. He still tries to find a balance so that building isn't just for content, such as taking his time to build a CaDA car set in the evening.

Woodward thinks adults might be purchasing toys to invest some time in their hobbies and take care of their mental health.

"I think the stigma has kind of lifted over collecting and everything," he said. "I think that for a long time people thought any of this stuff was strictly for kids, but as the years have gone on and adults have continued to adopt it, the stigma continues to go further and further away."

Trading cards have also become a major area of interest for some adults. Kian Golshan previously told Business Insider that Pokémon is a lucrative side hustle. For instance, he sold a Japanese-edition Charmander for $750 that he bought for $59.26. As Business Insider's Samuel O'Brient previously reported, Golshan was able to put the analytical skills that he developed while working in finance to work.

"It helps me kind of think through the risks and when to take profits, when to sell, what to hold, what's my like risk profile, what's tracking the market," Golshan said.

Byron, the Gen Zer who bought an American doll, still has her collection of dolls from her childhood. Plus, she has her most recent addition displayed in her room.

"I'm actually thinking about going back to the store again," she said. "Maybe I'll walk out with another doll. I guess we'll see."

• Over 10 million student-loan borrowers are behind on payments.
• Some borrowers said they're hopeful the midterms will prompt policy to protect those in default.
• States with closely contested Senate races, like Texas and Ohio, have high rates of nonpayment, per an Urban Institute analysis.

Sarah Bundy has been in and out of default on her student loans for nearly three decades.

She borrowed for college in the mid-1990s, but dropped out as her loan balance became unaffordable. At the time, it was $39,000. Now, it's $60,000.

The 55-year-old is hoping a "blue wave" will pave the way for Democratic legislation to shield borrowers at risk of default.

"At my age, I can never get ahead of this," Bundy said. "So I'm just trying to scooch under the wire as long as I can."

Roughly one of every six adult Americans has federal student loan debt, according to Federal Student Aid. And some 16% of federal and private borrowers were 60 or more days late on their payments in 2026, according to an analysis by the Urban Institute.

Student-loan payments add to the squeeze from groceries and housing in an election increasingly centered on the cost of everyday life. High utility bills and gas prices are an added strain, especially as inflation is outpacing pay hikes.

Economic concerns are also reshaping debates over AI, with politicians reconsidering their support for data centers amid a backlash.

For borrowers, the pressure is particularly acute, and elevated student-loan delinquency rates overlap with some of the country's most competitive races.

Texas and Ohio, home to closely-contested Senate races, both had higher-than-average non-payment rates. In the House, nine battleground districts as identified by the Cook Political Report as of Friday afternoon had worse nonpayment rates than the national average — some 28% of borrowers are delinquent in Texas's 34th District, and 25% in North Carolina's 1st.

Meanwhile, federal student-loan defaults, which typically occur after 270 days of nonpayment, are at a record high. While involuntary collections on defaults, including wage and federal benefit garnishment, have been paused for over a year, Democratic lawmakers have been pushing for legislation to protect borrowers once those consequences resume. Still, even a strong election for Democrats would likely leave them without sufficient numbers to override a presidential veto.

As of June 30, 9.3 million borrowers were in default, and an additional 1.5 million were in late-stage delinquency, according to Federal Student Aid. Roughly 14% of the $1.7 trillion student-debt load in the US is in default, or $234 billion.

Republican lawmakers have expressed support for President Donald Trump's student-loan changes, which they said will help borrowers repay their loans. Sen. Roger Marshall, who is up for reelection in Kansas, previously said that Trump's "big beautiful" spending legislation "made transformational reforms to student loans."

Student-loan borrowers have told Business Insider that they're worried about the consequences of defaulting, primarily through losing a chunk of their paycheck, Social Security payments, and tax refunds. Those concerns are exacerbated by the anticipated higher monthly bills under Trump's repayment overhaul.

"All we can do is keep pushing for every little bit of progress we can get on this," Bundy said.

A student-loan default wave

Luke Helton, a student-loan borrower in Tennessee, previously told Business Insider that the only way he can afford his expected $600 payment increase is by digging into his retirement.

While he voted for Trump because he believed in the administration's campaign promise to put America first, his student loan challenges have him second-guessing his vote.

"They talked a big game about caring about the little people, and they just haven't," Helton said.

The defaulted student-loan portfolio itself is undergoing changes. The Department of Education is moving forward with its plan, announced in March, to transfer defaulted student-loan accounts to the Treasury Department. The transfer will occur in phases, with the most recent step being the launching of a new online portal to help borrowers return to good standing and access default resources.

Education Secretary Linda McMahon said that the department "was never intended to serve as the fifth largest bank in America, and that's exactly why we partnered with the Treasury Department to improve the administration of federal student aid programs that millions of American students, families, and borrowers rely on."

Democratic lawmakers have raised concerns about the Treasury's capability to manage federal student loans. Over 60 of them pushed to halt the transfer and continue the pause on involuntary collections to continue giving borrowers relief as they navigate Trump's repayment overhaul. Sen. Bernie Sanders also led some of his colleagues in introducing a bill to prevent older borrowers and borrowers with disabilities from facing Social Security garnishment if they default.

Bundy recently went to Washington, DC, to urge New York lawmakers to support Sanders' bill. She's one of the millions of borrowers transitioning off the Biden-era SAVE plan, which offered lower monthly payments. She said she's not sure how she'll afford payments once they resume, and she's worried that she — and millions of other borrowers — could fall behind.

"When these garnishments start back up, it's really going to throw us pretty far back down," Bundy said. "I don't think people realize just how brutal it really is out there."

Have a story to share about student loans? Contact this reporter at asheffey@businessinsider.com.