UBS strategist Simon Penn argues that the Federal Reserve is unlikely to raise interest rates at its October meeting, despite markets pricing in a roughly 69 per cent chance of a hike. In a note on 29 September 2026, Penn pointed out that the Fed has never raised rates at a policy meeting held one month before midterm elections in the past 35 years.

The October 28 meeting falls just days before the early-November vote, and back-to-back hikes after September’s move would be politically explosive, in UBS’s view. September’s hike was already a historically rare fourth pre-election increase since 1990.

Fed Chair Kevin Warsh has framed that move as withdrawing one dose of accommodation, while Governor Lisa Cook has warned that AI-driven productivity gains will not offset near-term price pressures. Futures markets remain convinced the Fed will tighten again, but UBS says investors are underestimating the political constraint. The October decision is now one of the most closely watched events on the economic calendar.