Hosni Mubarak is likely to step down as early as tonight and pass power off to his vice president, according to reports. Unrest in Egypt continues to plague the region, and to roil financial markets and oil prices. Stocks here at home opened down, especially the NASDAQ, after Cisco Systems reported decent numbers but weaker than expected margins, especially in their switching products. John Chambers, Cisco’s CEO explained that sales are growing by 100% to 500%, depending on which segment of the their switching products you are following, but that pricing is in flux as the market adjusts to new releases, requirements, etc.
The 30-year fixed-rate mortgage hit its highest level since April of last year at 5.05% this week. Watch the long end of the yield curve for signs of steepening, as long rates begin to adjust up in anticipation of inflation pressures. The Fed will be forced to adjust short rates eventually, to combat inflation, and also because pricing of short instruments will dictate higher yields.
Kevin Warsh, one of the Fed governors, announced today that he is stepping down. I didn’t catch his reason for this action, and I have not seen who his likely replacement will be as of yet. The change could signal a change in tone of the board, although it is unlikely that their overall strategy will change.