The yield curve is what it is: It's a shorthand guide to the stance of monetary policy. It acquires its special, omniscient powers because it represents the relationship between a rate set by the central bank, with its magical powers to create and destroy reserves, and a market rate, which is where the supply and demand for credit intersect. Listening to Long Rates So, will the yield curve act as a constraining force on the Fed and forestall more than a couple of additional rate increases?