“The timing of the initial rise in the fed funds target as well as the path for the target thereafter are contingent on economic conditions,” Yellen said. “Monetary policy will still be very accommodative for a long time” after rates rise.

Most officials still see the first increase taking place next year, according to quarterly forecasts released today. At the same time, the forecasts show central bankers expect rates to rise more slowly over the next three years than previously anticipated, even as the jobless rate falls in 2015 to the level they consider full employment.

Stocks, Treasuries

Stocks extended gains and Treasury yields were higher after the Fed's announcement. The Standard & Poor's 500 Index jumped 2 percent, the most since 2013, to 2,012.89 as of 4 p.m. in New York. The 10-year Treasury note yielded 2.14 percent, a gain of eight basis points.

The FOMC statement made no reference to the Russian currency crisis or other global risks that have roiled financial markets. Yellen said officials discussed Russia at this week's policy meeting and agreed it would have little impact on the U.S.

“U.S. banks' exposure to Russian residents is really quite small in terms of relative to their capital,” Yellen said. “In terms of the portfolios of U.S. residents, there are Russian securities, but they account for a very small share.”

Yellen said keeping borrowing costs low will help move inflation back up to the Fed's 2 percent goal. Consumer-price gains have lagged behind the goal for 30 straight months, and inflation is forecast to stay low next year before rising again toward the target in 2016.

She said the committee would like to see “a short period of a slight undershoot” of its maximum employment goal, so unemployment gets low enough to drive up wages and prices.

“Historically, we have seen, as the economy strengthens and slack diminishes, that inflation does tend to gradually rise over time,” Yellen said. “I will be looking for evidence that I think strengthens my confidence in that view.”

In its statement, the Fed gave a rosier assessment of the job market, while saying it “continues to monitor inflation developments closely.”

The Fed's preferred inflation gauge, the personal consumption expenditures index, rose 1.4 percent in the year through October.

Data released today confirm the trend. The consumer price index, a separate inflation measure, rose 1.3 percent from a year earlier in November, down from a 1.7 percent gain the month before.

At the same time, the labor market has improved faster than Fed officials expected, bolstering the view of officials who say rates should rise sooner rather than later.

Payroll Gains

American employers added 321,000 workers to payrolls in November, bringing the total number of jobs gained this year to 2.65 million, the most since 1999. The jobless rate remained at a six-year low of 5.8 percent, close to the Fed's goal for full employment.

The Fed's easy money policies have kept borrowing costs low, making it cheaper for consumers to buy homes, appliances, and cars, while fueling-stock market gains that have boosted household wealth.

The S&P 500 Index is up 8.9 percent this year, even as concerns about global growth and oil prices have trimmed its gains.

The Fed cut its benchmark rate for overnight loans among banks to zero in December 2008 to battle the financial crisis while embarking on three rounds of large-scale asset purchases aimed at suppressing longer-term rates and stimulating growth.

Another easing tool has been forward guidance to manage expectations for the future path of rates. Since September 2012, the Fed has assured investors that policy would remain easy for a “considerable time.”

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