U.S. Federal Reserve Chair Janet Yellen speaks at a press conference following the two-day Federal Open Market Committee meeting in Washington March 18, 2015. REUTERS/Joshua Roberts

UPDATE: 3:20 p.m. EDT

U.S. stocks surged during Janet Yellen's news conference, with the Nasdaq composite hitting the psychologically important 5,000 milestone for the second time this month. The Dow soared 243 points, or 1.36 percent, to 18,092.08; the S&P 500 Index added 31.85 points, or 1.54 percent, to 2,106.83. The Nasdaq composite gained 60.69 points, or 1.24 percent, to 4,998.13.

UPDATE: 3:09 p.m. EDT

Yellen expects a strengthening U.S. dollar to weigh on exports and have a "notable drag on outlook." The FOMC expects the unemployment rate to fall to 5 percent to 5.2 percent in 2015, down from its previous estimate of 5.2 to 5.3 percent following the Fed’s December meeting. Inflation is forecast to come in at 1.3 or 1.4 percent, also below previous forecasts. Meanwhile, annual U.S. gross domestic product in 2015 is expected to grow 2.3 percent to 2.7 percent, down sharply from the central bank's estimate of 2.6 percent to 3 percent in December, the FOMC said in its economic projections Wednesday.

"We need to watch the data and continually reformulate" the Fed's forecasts, Yellen said. “We can’t provide certainty and shouldn’t provide certainty because economic developments are uncertain.”

UPDATE: 2:53 p.m. EDT

"Some of the headwinds that have long been holding the economy back are beginning to recede," Yellen said. The FOMC anticipates it will raise the target range for the federal funds rate when it has seen further improvement in the labor market. The Fed said it is "reasonably confident" that inflation will move back to the central bank's 2 percent goal over the medium term.

UPDATE: 2:41 p.m. EDT

U.S. stocks rallied Wednesday afternoon, with the Dow Jones Industrial Average surging more than 200 points, after the U.S. Federal Reserve dropped its "patient" stance, putting the central bank on course to hike rates as early as June. “Just because we removed the word 'patient' from the statement doesn’t mean we’ll become impatient,” Fed Chairwoman Janet Yellen warned during a news conference Wednesday. Although an increase in the federal funds rate remains unlikely at the April meeting, Yellen said the central bank has not ruled out a rate hike in June.

UPDATE: 2:16 p.m. EDT

The U.S. Federal Reserve removed "patient" from its monetary policy statement Wednesday, signaling the central bank is on course to raise interest rates in June at the earliest. The move signals the Fed is one step closer to ending this year the near-zero rates that have been at historic lows since the financial crisis.

U.S. central bank policymakers met for a two-day meeting Tuesday and Wednesday, discussing whether tightening monetary policy too soon could damage the economy and dampen the prospects for maximum employment and the targeted 2 percent inflation. But the statement suggests the Fed still expects to raise rates in mid-2015.

Most economists had expected the Federal Open Market Committee, the central bank's board that determines the direction of monetary policy, to drop the word “patient” from its statement, which refers to how long interest rates will be maintained at the current historic lows. “The committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term," the Federal Reserve said in its monetary policy statement Wednesday.

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The Fed will also release its final projections for 2014, and economists expect there to be a slight upward adjustment to gross domestic product, along with small downward adjustments to the unemployment rate and inflation.

The FOMC will wrap up its two-day policy meeting with a press conference from Federal Reserve Chair Janet Yellen at 2:30 p.m. EST.

Following the Fed’s announcement, the Dow Jones Industrial Average, which measures the share prices of 30 large industrial companies, soared 153.47 points, or 0.86 percent, to 18,002.55; the S&P 500 Index, which tracks the share prices of the nation's 500 largest publicly traded companies, added 19.73 points, or 0.95 percent, to 2,094.01. The Nasdaq composite gained 37.87 points, or 0.77 percent, to 4,975.31.