Fed will remain 'patient,' upgrades economy

The Federal Reserve said it would remain "patient" on raising rates, but indicated it saw the U.S. economy getting stronger. The Federal Open Market Committee released its statement Wednesday afternoon. In a unanimous vote, the FOMC said that "the Committee judges that it can be patient in beginning to normalize the stance of monetary policy." That language was the same as the previous month's statement. The statement completely dropped "considerable time" from its language on tightening.

Read More Here's what changed in new Fed statement The Fed also said it has seen inflation decline, and it may decline further. It also said that inflation should increase over the medium term as the labor market improved and the temporary effects of low energy prices fade. The statement said that economic activity has expanded "at a solid pace" since it met in December-since the last statement, the language changed from "moderate pace." It also noted that labor market conditions have improved, characterizing job gains as "strong" as opposed to last statement's "solid" description. "Bottom line, the FOMC is again telling us that they are looking past the decline in inflation (and instead embraced it somewhat), did not include any comment about weakness overseas and there was no mention of the stronger US dollar. Thus, the improving labor market and "solid" pace of economic growth is their main focus," Lindsey Group Chief Market Analyst Peter Boockvar said in a note after the statement release. He said he interpreted Wednesday's statement to mean that there will be no rate hike in March, and "an April hike is still on the table with the latest first hike being in June."Janus Capital's Bill Gross told CNBC after the statement release that he thinks the Fed will raise its rates by 0.25 percent in a symbolic move sometime this year-he had previously indicated that he did not see rate increases on the horizon. Read More History shows Fed will ease market pain While the FOMC voted seven to three on December's nearly identical statement, Wednesday's decision was unanimous. Committee membership changed with the new year. Most Fed watchers did not expect any significant announcements or language changes to this month's statement. The FOMC was expected to maintain its "patient" language for eventually raising rates. Markets did not respond significantly to the statement-oil moved to its lowest since April 2009 after the release, but there was no clear connection between the two events. In fact, some have questioned if the Fed can tighten its policy in the next few months while facing a surging dollar (Exchange: .DXY). Along with the globally strengthening currency, reduced oil prices may be leading to less inflation than would warrant a rate increase. Internationally, the Fed is operating in an environment that is seeing a growth slowdown in Asia and the launch of a major stimulus program in Europe.