US 2-year Treasury's at an 8 Year High

If you were told six months ago that US 2-year Treasury yields would touch a 8 year high you probably would've disregarded such comment as delusional.

Fast forward to March, 6th 2017 and you would've witnessed an unbelievable turnaround in events with sentiment showcasing the incredible adaptiveness of participants to the change of circumstances having observed newly elected US President Donald Trump assume office after a shock victory over the politically experienced Hillary Clinton.

And although the tenure of the Trump administration has gotten off to a hasty start, so has the US Federal Reserve's reasoning to no longer accept the creed "lower for longer" in it's efforts to normalize interest rates.

Ironic one might feel since most other developed nations around the world grapple with economic woes of deflation and low growth; the US has become the exception.

Up until this point we've seen reactive decisions taken by the Fed who have firmly stood behind the argument of awaiting confirmation in economic indicators before acting on interest rate activity.  

The 2-year Treasury #yield has reached the highest level since August 2009 as markets start to price in gradual #Fed tightening. pic.twitter.com/XivYHPAUeW

— jeroen blokland (@jsblokland) March 6, 2017

The shift in market opinion has raised a cause for concern in questioning the independence of the Federal Reserve and whether the hastened belief that the US economy is able to sustain further hikes is truly based on this thought or rather in the interest of retaining seats on the board of the Fed.

President Donald Trump has once remarked during his candidacy that he thought interest rates were being kept artificially "low" in the interest of preserving political power.

If the Fed starts becoming proactive instead of reactive it's likely to put a hold on the economy and reveal where their political allegiance lies.

The separation of uniformity in setting interest rates amongst the largest economic nations of the world does present a risk of producing headwinds in the future and moreso if the divergence between the US and other nations grows wider, a reality which is fast becoming real.