Fed keeps patient approach to hiking rates despite global turmoil

By Michael Flaherty and Howard Schneider

WASHINGTON, (Reuters) - The Federal Reserve on Wednesday repeated that it will remain "patient" in deciding when to raise interest rates, and said the U.S. economy is on track despite turmoil in other markets around the world.

Concluding their first policy-setting meeting of the year,

Fed officials looked past the urgent moves made by other central

banks this month to boost their struggling economies and saw

continued economic expansion in the United States.

"The committee judges that it can be patient in beginning to normalize the stance of monetary policy," the Fed's policy statement said.

The Fed acknowledged that inflation had declined further below its longer-run objective and that market-based inflation measures had fallen substantially - a more negative assessment of inflation pressures than in December.

But the Fed's overall tone was optimistic, keeping it on pace to raise rates later this year. Some Fed officials and economists have indicated a rate hike, which would be the first in nearly a decade, is more likely to occur between June and September.

The Fed did not release a new economic forecast and no press conference was scheduled following its two-day meeting.

The statement follows a policy shift begun in December when

the Fed said it would take a patient approach to raising rates,

and then Fed Chair Janet Yellen in a press conference clarified that "patient" meant at least two meetings.

In the December statement, the Fed said that approach was

consistent with its previous guidance of keeping rates near zero

for a "considerable time" after completing its third round of

bond-buying, which ended in October.

The statement on Wednesday removed the reference to its former guidance.

The Fed said "economic activity has been expanding at a solid pace," a move away from its "moderate pace" reference in its prior statement.

"Labor market conditions have improved further, with strong job gains and a lower unemployment rate," the Fed said.

The statement was adopted without dissent.

(Reporting by Michael Flaherty and Howard Schneider; Editing by Paul Simao)