DBS indicates preference for REITs with high yields amid Fed's hawkish stance

$DBS Group Holdings(D05.SG)$
“Winning sectors for the quarter included the hospitality sector, which rose 0.2% m-o-m, followed by the European office sector (-1.8% m-o-m) and US hospitality sector (-2.1% m-o-m),” the analysts note in their report.

In August, the Singapore REITs Index (FSTREI) declined by 4.6% m-o-m, underperforming the $FTSE Singapore Straits Time Index(.STI.SG)$ , which rose 0.3% m-o-m in the same month. The decline came mainly after Fed chairman Jerome Powell repeated his hawkish stance during the annual central bank symposium at Jackson Hole towards the end of August, in a bid to reduce inflation rates back to below 2%.

As contributors of inflation including heightened energy costs and labour shortages continue to persist albeit with a slight moderation in the most recent months, interest rate futures are pricing in the market expectation that policy rates would reach the 3.75%-4.00% range by next March.