But this didn't result in any change to their expectations for the path of interest rates.
"Investors are still underestimating how much the Fed will raise interest rates given the likelihood of higher core inflation in the US in the coming months", says Oliver Jones, an economist at Capital Economics. The market widely expects a quarter-point increase in March.
"Without upgrading language elsewhere in the statement in reference to inflation or the balance of risks to the outlook, we do not believe this signals the committee has decided that four hikes are now appropriate", stated Barclays.
The current economic expansion also is approaching the end of its ninth year, one of the longest periods of uninterrupted economic growth in U.S. history. "On the margin, Europe is actually growing faster than was expected", Bostjancic said. However, for the year, the data showed that inflation increased by 1.7%, down from November's reading of 1.8%. Inflation on a 12-month basis is expected to move up this year and to stabilise around the Committee's 2 per cent objective over the medium term.
David Riley, partner and head of credit strategy at BlueBay Asset Management, said the final judgement on Yellen's term and legacy will not be made for a few years yet, but Powell has a very hard act to follow.
Yellen will join former Fed Chairman Ben Bernanke at the Brookings Institution. The committee stated it "expects that economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate". But, in keeping with Fed's close-to-the-vest style of thinking, not a word was said.
"Janet Yellen will leave on a high note", Diane Swonk, chief economist at Grant Thornton, wrote in a research note, citing her achievements in promoting diversity among policymakers and looking past unemployment rates in measuring labour markets. George Soros is the latest to suggest perfectly explicitly that liberal democracy is at risk of foundering.
Voting for the FOMC monetary policy action were Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Thomas I. Barkin; Raphael W. Bostic; Lael Brainard; Loretta J. Mester; Jerome H. Powell; Randal K. Quarles; and John C. Williams.Tireless monetary reformer and watchdog Ron Paul warns, "The economy may seem to have recovered, but the recovery is not built on a firm foundation". The 10-year inflation break-even rate, which reflects the yield premium on the 10-year U.S. Treasury note over the comparable Treasury inflation-protected security, has settled recently at its highest levels since last March, before the inflation soft patch hit. It would appear that so far the money is following the rout of a Brussels land-grab that assumes that the less able constituent nation states are to govern themselves, the more the centralist machinery of Brussels will try to fill the vacuum.
At 20:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at 6.29519.