The Fed is staying the course with its $85 billion monthly bond-buying stimulus. Chairman Ben Bernanke is also expected to answer questions about the banking crisis in Cyprus.
Update at 2:03 p.m. ET. Rates Unchanged:
Following a meeting of the Federal Open Market Committee, the Federal Reserve said in a policy statement today that it is continuing with its "highly accommodative stance of monetary policy."
That means that it will stay the course with its aggressive stimulus, buying $85 billion of bonds a month.
"Information received since the Federal Open Market Committee met in January suggests a return to moderate economic growth following a pause late last year," the Federal Reserve said. "Labor market conditions have shown signs of improvement in recent months but the unemployment rate remains elevated."
The Fed decided to keep its overnight lending rate at near zero. It said it would keep it there "as long as the unemployment rate remains above 6.5 percent."
Update at 2:12 p.m. ET. Projections Remain Almost Unchanged:
The Federal Reserve also made few changes to the economic projections (pdf) it released in December.
For example, it still sees GDP growing from 2.9 to 3.7 percent by 2015 and it still sees the unemployment rate hovering between 6.0 to 6.5 percent by 2015.
The Fed did tweak its 2013 GDP projection. They now see economic expansion in 2013 at a rate of 2.3 percent to 2.8 percent. In December, they thought that growth would be 2.3 percent to 3.0 percent.
Our Original Post Continues:
After the Federal Open Market Committee finishes its two-day meeting, they will issue a policy statement at 2 p.m. ET.
The Wall Street Journal reports that they don't expect the Fed to change any of its policies. The economy continues to improve slowly and inflation is still in check, so expect the Fed continue its $85 billion monthly bond-buying stimulus.
The New York Times also reports that the stock indices were up. The Times adds:
"'With the market up 10 percent for the year so far, if the Fed changes ever so slightly, the market could have a knee-jerk reaction here,' said Steve Goldman, principal at Goldman Management in Greenwich, Conn.
"'But I don't think that will be the case,' he said. 'There are still concerns in the euro zone, and the domestic economy is decent but not as strong as we would want it to be.'"
The Fed will release its policy statement at 2 p.m. ET. Chairman Ben Bernanke will follow that up at 2:30 p.m. ET. with a press conference.
The Fed will post its statement here.
We'll update this post once those two things happen.