The Federal Reserve opted not to raise interest rates during its policy meeting this week and pledged that future moves will be done patiently and with an eye toward how economic conditions unfold. In a statement Wednesday, the central bank voted unanimously to hold its policy rate in a range between 2.25 percent and 2.5 percent. The decision came along with a separate statement on the Fed's balance sheet indicating that policymakers will consider adjusting the reduction of the central bank's bond portfolio if conditions warrant. Officials in that statement also said they expect to operate with "an ample supply" of bank reserves, an indication that the balance sheet will remain sizable once its reduction is complete. In a move that represented a divergence from policy of the past several years, the Fed dropped language that more rate hikes likely would be warranted – "further gradual increases," as stated after the December meeting – and said it was adopting a more cautious approach.

"In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes," the statement said. Stocks jumped in reaction to the new statements from the Fed. The Dow Jones Industrial Average surged 450 points to a fresh high for the day shortly after the afternoon announcements. The move comes after a tumultuous period that began in early October. During a question-and-answer session Oct. 3, Fed Chairman Jerome Powell said the central bank was a long way from adopting a neutral rate of growth. The remark jarred Wall Street and sent markets into a spiral in which major averages briefly hit bear market territory. Powell again irked investors in December when he said the Fed's program to reduce the bond holdings on its balance sheet was on "autopilot." Wednesday's statement from the policymaking Federal Open Market Committee struck a more tepid approach. The committee lowered its assessment of economic growth from "strong" to "solid" and noted that its inflation gauges "have moved lower in recent months." The statement also removed the "balance of risks" portion in which the committee sought to quantify the chances of economic growth above or below forecasts.

Separate statement on balance sheet