Fed says vaccinations and strong policies have helped the economy, but also notes inflation is rising

Inflation has also risen as the economy gains strength, but those increases largely reflect transitory factors, the Fed said in a statement released after its two-day policy meeting. Fed leaders have said they expect temporary price bumps, but they don't expect those increases to persist throughout the entire economy.

"The path of the economy will depend significantly on the course of the virus, including progress on vaccinations," the statement read. "The ongoing public health crisis continues to weigh on the economy, and risks to the economic outlook remain."

Federal Reserve Chair Jerome Powell is set to take questions at a 2:30 EDT news conference. He is likely to get questions on how the Fed will judge inflation dynamics if the economy rebounds strongly this year, as many expect. Powell may be asked when the Fed will start to trim its economic supports, and how vaccination rates - in the United States and abroad - shape his outlook.

Powell has long urged caution, saying the economy still has a long way to heal, and that reopening economy too quickly could cause coronavirus cases to spike. For much of last year, he pushed for more help from Congress to target areas of the economy struggling most.

Fed leaders stuck with their current policy stance, keeping rates near zero and buying at least $120 billion of Treasury bonds and mortgage-backed securities each month. Powell and other central bank officials have said they won't raise rates until there has been substantial progress in the labor market, which is down at least 8.5 million jobs since February 2020.