Daily Market Update 9/14/12

Mortgage rates inched lower Friday following yesterday's FOMC meeting.  The Fed announced it will implement "QE3" by purchasing up to $40 billion of mortgage-backed securities (MBS) monthly until labor markets improve.  The Fed also indicated it expects to maintain extremely low short-term rates until at least 2015.  The announcement produced a strong rally in MBS markets Thursday afternoon, although some of those gains have been given back this morning.  In economic news, the August Consumer Price Index (CPI) rose 0.6%, in line with expectations.  Core CPI, which excludes volatile food and energy components, increased 0.1%, a bit less than expected.  Retail Sales jumped 0.9%, slightly better than forecast, while Industrial Production fell 1.2%.  Consumer Sentiment reached its highest level in four months at 79.2, beating expectations.  Stocks moved modestly higher.  No other key data will be released today.