[UBS: In the past 35 years, the Federal Reserve has never raised interest rates at its October meeting before midterm elections] On September 29, UBS analyst Simon Penn wrote in a report on Monday that traders believe that the probability of another interest rate hike next month is 68%. But he noted that markets are underestimating the likelihood that the Fed will exercise restraint before the midterm elections. Penn pointed out that this kind of pricing ignores the most important rule of political operation in Washington - in the past 35 years, the Federal Reserve has never raised interest rates at a policy meeting held a month before a midterm election. Current market pricing shows that the Federal Reserve will raise interest rates by 17.4 basis points at the October 28 meeting (or the probability of raising interest rates is 69%). But the likelihood of that happening is extremely low. Since 1990, whenever the Fed meets in October before an election, it has never raised interest rates. In the past 35 years, only three times (2004, 2018 and 2022) has the Fed raised interest rates at the September meeting closest to the election.