I had the same problem after upgrading to Sierra.
In addition to brew --prefix, which displays Homebrew’s install path, there’s also brew --repository, which displays where it’s .git directory is located.
man brew says that claims that “for standard installs, the prefix and repository are the same directory”. Either the man page is out of date or my install isn’t “standard”, but my prefix is /usr/local and my repository is /usr/local/Homebrew.
Using the same command but with cd $(brew --repository) worked for me:
cd $(brew --repository) && git fetch && git reset --hard origin/master