UBS analyst Simon Penn noted in a Monday morning report that while the market is currently pricing in about a 69% probability of a rate hike at the October 28 meeting, this expectation significantly overestimates the likelihood of the Federal Reserve taking action before the midterm elections. Historical data shows that since 1990, the Federal Reserve has never raised rates at its October meeting close to the November general election. Penn advises traders to downplay October rate hike expectations and reduce the cumulative rate hike pricing for the next year from the current 91 basis points to 75 basis points. Meanwhile, UBS US equity strategist Keith Parker believes that the sharp rise in Treasury yields has significantly suppressed equity valuations, but a pullback in yields also implies substantial room for a market rebound.