Stocks Soar After Fed Hints Interest Rates May Rise , But Slowly

Federal Reserve Chair Janet Yellen said today she is not ruling out a rate hike after April, but the timing of a raise depends on the economic data. The news sent the stock markets soaring on relief that interest rates probably won't be raised very much very soon.

"We consider it unlikely that economic conditions will warrant an increase in the target range at the April meeting, such an increase could be warranted at any later meeting, depending on how the economy evolves. In particular, this change does not mean that an increase will necessarily occur in June, although we can't rule that out," she said in a press conference today following the Fed's statement release.

"As we noted in our statement, the decision to raise the target range will depend on our assessment of realized and expected progress toward our objectives of maximum employment and 2 percent inflation."

The Dow Jones Industrial average, which had been down nearly 100 points before the statement was issued, ended the day up 227 points, or 1.3 percent, to 18,076.

The Federal Reserve dropped the word "patient" from its statement, and Wall Street is seeing this as a subtle indication that the era of zero interest rates is about to end.

The Fed has kept its key short-term rate near zero since late 2008 to bolster the economy after a devastating financial crisis and recession. In its statement, the Fed noted that the economy, which it previously said was growing solidly, has "moderated somewhat."

When asked what would give them confidence to increase rates, Yellen said wage growth is not a necessary condition. They would like to see it but not a necessary condition.

Societe Generale Chief economist Aneta Markowska says, "What's important about this part of the statement is that it clearly says the FOMC is looking for further' improvement in the labor market and they want to be confident that inflation will eventually return to 2 percent before raising interest rates. But they will hike long before inflation gets to 2 percent they just have to be confident that it will eventually get there."

The Fed has kept its key short-term rate near zero since late 2008 to bolster the economy after a devastating financial crisis and recession. In its statement, the Fed noted that the economy, which it previously said was growing solidly, has "moderated somewhat," the Associated Press reported

In a statement released at the end of a two-day policy meeting Wednesday, the Fed forecast that the U.S. unemployment rate can fall further without spurring inflation.

The Associated Press contributed to this report.