THE FED JUST REVERSED ITSELF, AND NOBODY WAS FULLY READY
For two years, the story was simple: the Fed cuts, markets cheer, repeat. On September 16, that story ended. The FOMC voted 12-0 to raise the federal funds rate by 25 basis points to a range of 3.75% to 4.00%, the first hike since 2023. Chair Kevin Warsh was blunt about why: inflation remains elevated, and the committee wants a faster path back to its 2% target.
The move wasn't a total surprise going in, but the tone was hawkish enough to catch traders off guard. The 10-year Treasury yield touched 5% for the first time since 2023 just two days before the decision. By September 17, markets had mostly made peace with it, with US stocks rallying as oil prices and yields cooled off. The dot plot still points to at least one more hike before year-end.
What matters now isn't the 25 basis points itself. It's that the Fed just told everyone the cutting cycle is genuinely over, and every asset class from banks to gold to REITs is repricing around that new reality in real time.
GOLD BROKE THE RULEBOOK
Every trader learns the same rule early: rates go up, gold goes down. Higher rates make bonds more attractive, and gold pays nothing, so why hold it. This week, gold didn't read the textbook. It dipped over 1% right after the hike, touching a near six-week low, then reversed hard within a single session, climbing back to roughly $4,360 to $4,370 an ounce by September 17.
The reason is quieter than the headline. Real yields, not the sticker-price rate, are what actually move gold, and when Brent crude fell more than 4% the same day, inflation fears eased and Treasury yields pulled back from their spike. Underneath it all, central banks bought a record 288.9 tonnes of gold in the second quarter alone, buying that never stopped even while prices were falling.
The obvious reaction to a big news event is rarely the only reaction worth watching, and this week gold made that point for free.
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ONE INDEX, TWO OPPOSITE WEEKS
DBS, OCBC and UOB are having a very good week. S-REITs are having a very bad year. Both sit inside the same Straits Times Index, and the gap between them tells you exactly where the market is pricing risk right now.
On September 17, the STI gained 0.5% as UOB rose 1.6%, OCBC added 0.3% and DBS climbed 0.2%. Meanwhile the FTSE ST All-Share REIT Index has fallen roughly 8.2% year-to-date, even as the broader STI has surged over 20% in the same window. Higher rates mean higher borrowing costs for REITs, and income investors have been feeling it since well before this week's decision.
Nothing here is broken. Most REITs have hedged a large share of their debt, and distributions are still intact. But valuation and fundamentals are two different conversations, and this week made that split impossible to ignore.
AI'S BIGGEST NAMES JUST HIT THE BRAKES
While the Fed dominated headlines, a different story rattled tech and chip stocks days earlier. Anthropic CEO Dario Amodei published an essay calling for AI labs to slow the pace of frontier model development, and OpenAI's Sam Altman and xAI's Elon Musk both signaled agreement soon after.
The market reaction was immediate. SoftBank shares fell as much as 13.2% in Tokyo trading, Kioxia dropped 9.8%, and Tokyo Electron slid 3.7%, with TSMC and SK Hynix also declining across Asian markets. Amodei's essay came days after Anthropic disclosed that its own models had been misused for cyber operations and fraud between December 2025 and August 2026, which added weight to the call.
This isn't a story about AI stalling out. It's the industry's biggest players publicly admitting the pace has outrun the guardrails, and markets moved fast to price that in.
WHAT HIGHER RATES MEAN FOR YOUR T-BILLS AND SAVINGS
For anyone parking cash in T-bills or Singapore Savings Bonds, this week's hike isn't abstract. The 6-month T-bill yield already hit 1.70% p.a. at the September 10 auction, the highest print of the year, and the next auction in October could push toward 1.80% to 1.95% p.a. as the market digests the Fed's move.
That's good news if you're a saver. It's less good news if you're carrying a floating-rate mortgage, since SORA tends to follow the Fed with a lag of a few weeks. On a S$1,000,000 floating-rate loan over 25 years, each 25 basis point move adds roughly S$130 to S$150 a month.
None of this calls for a dramatic move. It's a reminder to actually check what your cash is earning before assuming it's still competitive.
With 20 years of investment expertise, Caleb Gan is a seasoned professional in stock trading. The hard work and dedication were recognized when his partner and him were featured on Singapore TV Channel 9's MoneyWeek, a prominent financial program. He's also had the privilege to share insights on radio stations like 93.8Live, Capital 95.8FM, and 96.3FM through live interviews about stock market investments. Beyond that, he's also the co-founder of NDU System, where he continues to help others navigate the world of trading.
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