This week's macro highlights review: Warsh makes his first move to raise interest rates, Saudi Arabia rushes to repair its oil lifeline.

BlockBeats news, September 19 — Global markets this week swung sharply around Fed rate hikes, Middle East conflicts, and the AI "slowdown" debate. The Fed raised rates for the first time since July 2023 to 3.75%–4%, with Warsh's first policy adjustment after taking office drawing attention; the Bank of Japan simultaneously hiked rates to a 31-year high, but the yen weakened instead. In the Middle East, the Strait of Hormuz and Saudi energy facilities remained under pressure, and Saudi Arabia began emergency repairs on damaged oil pipelines. The AI industry suddenly collectively discussed development speed, while Turkey's stock market also plunged due to fund redemptions and a liquidity crisis.

1. Fed hikes unanimously, Warsh makes first move

The Fed raised rates by 25 basis points to 3.75%–4%, the first hike since July 2023 and the first policy adjustment after Warsh became chairman. The dot plot showed 16 of 18 officials expect at least one more hike in 2026, with the 2026 median rate rising from 3.8% to 4.1%. Warsh said inflation remains "too high, and for too long," and current financial conditions are not particularly restrictive. Trump said U.S. rates "should be 1% or lower."

2. BOJ hikes, yen keeps weakening

The Bank of Japan raised its policy rate by 25 basis points to 1.25%, a 31-year high, and said it will continue adjusting policy if the economy and prices meet expectations. Because the hike was fully priced in and two board members opposed it, the yen did not strengthen; USD/JPY instead broke above 157.

3. Middle East conflict spills over, Saudi Arabia rushes to repair oil lifeline

Friction around the Strait of Hormuz continued, with multiple merchant ships and tankers attacked, and shipping costs rising notably. Houthi forces also continued attacking Saudi energy facilities, raising risks in the Red Sea and Bab el-Mandeb Strait. Saudi Arabia began building a bypass for the damaged east-west oil pipeline to restore transport as soon as possible. Iran was approved to send its president and foreign minister to New York for the UN General Assembly, signaling limited easing in U.S.-Iran contacts, though the risk of military escalation remains.

4. AI industry suddenly discusses "slowdown"

Heads of AI companies including Anthropic, OpenAI, and xAI recently publicly discussed slowing the pace of frontier model capability improvements and strengthening safety testing and audits. OpenAI also published a "model misalignment" disclosure framework, publicly revealing six cases of anomalous behavior. Companies such as Meta and Nvidia took a different view on industry-wide coordinated slowdown. Meanwhile, U.S. courts accepted civil lawsuits against Anthropic, OpenAI, xAI, and Google, making AI safety, regulation, and capital expenditure new market variables.

5. Turkish stock market hit by liquidity shock

Turkey's BIST 100 index fell for consecutive days this week, dropping 5.54% on Wednesday alone, at one point falling more than 7% intraday and triggering a circuit breaker. The trigger was related to redemptions by local investment funds and liquidity problems, with several funds unable to meet redemption requests on time. Turkey's central bank subsequently expanded its repo funding scale to 300 billion lira, and regulators also suspended trading in some funds and lowered margin requirements for financing transactions, with the market rebounding on Thursday.

6. Russia-Ukraine "energy ceasefire" has yet to materialize

Trump previously said Russia and Ukraine agreed to stop attacking each other's energy facilities, but the two sides have not confirmed a formal agreement, and attacks on refineries, energy and port facilities are still continuing. Reuters data shows that three of Russia's six largest diesel refineries have halted production or significantly reduced output due to drone attacks, and the Russian government is reportedly preparing to extend diesel export restrictions.

7. Kioxia plans to raise at least $10 billion in the US

Kioxia is advancing a US ADS listing plan, with Bloomberg saying it is considering raising at least $10 billion through ADRs, possibly as early as 2027, though the specific size and timing have not yet been determined. Meanwhile, SK Hynix's Solidigm is evaluating building a NAND flash production base in the eastern United States. Growing AI data center demand is driving up memory chip prices and market revenue, and memory manufacturers are accelerating the expansion of their US domestic footprint.