The long awaited Federal Reserve meeting wound down on Wednesday after taking a mere baby step towards hiking interest rates for the first time since 2006. At the same time, it downgraded its economic growth and inflation projections, signaling it is in no rush to push borrowing costs to more normal levels.

As anticipated, the U.S. central bank removed a reference to being "patient" on rates from its policy statement, opening the door wider for a hike in the next couple of months while sounding a cautious note on the health of the economic recovery.

Fed Chair Janet Yellen suggested they were in no hurry and said the pace of tightening, once begun, would be slower than previously anticipated.

“Just because we removed the word 'patient' from the statement doesn't mean we're going to be impatient," Yellen said in a press conference after Wednesday's statement.

Strong Dollar

One reason behind the hesitation is a surge in the dollar, triggered in part by easier monetary policies abroad. The dollar’s strength is repressing already too-low U.S. inflation while restraining economic growth.

Stocks on Wall Street surged and oil prices jumped as much as 5 percent after the Fed statement. The dollar tumbled against other major currencies and the U.S. 10-year Treasury yield dipped below 2 percent for the first time since March 2.

Fed officials also slashed their median estimate for the federal funds rate - the key overnight lending rate - to 0.625 percent for the end of 2015 from the 1.125 percent estimate in December.