Notwithstanding the upgrade of language in the statement, which included the addition of the word "future" to the sentence: "The Committee expects that economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate", higher inflation is now nearly guaranteed, and the Federal Reserve (Fed) is likely to have to raise interest rates more aggressively than previously thought.
Noting a rise in business optimism, an increase in business investment, a strengthening labor market and an accelerating pace of economic growth, Quarles said the underlying fundamentals of the USA economy are strong.
Investors have all but priced in another rate increase at the central bank's next meeting, on March 20-21, and Fed officials have signaled they expect to deliver two more rate hikes before the year is out.
The S&P 500 is up 27.72 points, or 1 percent.
Later on Wednesday, investors will turn their attention to the minutes of Fed's last policy meeting in late January.
The yield on the 10-year Treasury, which is used as a benchmark for mortgages and other loans, has been rising in recent months from a recent low of 2.04 percent in September.
The dollar was up by 0.2 percent to 107.54 against the Japanese yen, after bottoming out at 105.55 last week.
The U.S. two-year rate was at 2.26 percent.
The new Surface Pro finally launches in India
After nearly a year of its original launch, Microsoft has today launched its hybrid computer - the Surface Pro in India. The Core m3 variant of the New Surface Pro with 128 GB SSD, 4GB RAM and Intel HD Graphics 615 is priced at Rs64,999.
Sticking closely to a view he laid out earlier this year, Harker said he expects the USA economy to grow 2.5 percent this year before slowing to 2-percent growth next year and to below 2 percent in 2020.
In late trading, the Dow Jones Industrial Average is up 0.17 per cent at 25,007.56, the S&P 500 has gained 0.57 per cent to 2,739.81 and the Nasdaq Composite has added 0.60 per cent to 7,277.78, having fallen back from lifts of 0.88 per cent, 0.87 per cent and 1.18 per cent, respectively. They were last at 2.95 percent.
An index that tracks USA manufacturers rose to a almost 3 1/2-year high (http://www.marketwatch.com/story/us-businesses-grow-rapidly-at-start-of-2018-ihs-markit-finds-2018-02-21) in February and a gauge for service-oriented companies hit a six-month peak, according to IHS Markit's flash PMI.
US Federal Reserve officials have become more confident about the growth and inflation outlook, paving the way for gradual interest rate hikes in the future.
The euro edged 0.41 percent lower to $1.2286. The manufacturing index rose to 55.9 from 55.5.
WELLINGTON: The S&P/NZX 50 Index rose 1.26 per cent, to 8,200.27.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.7 per cent after slipping earlier in the session following the U.S. market losses, which snapped a six-session winning streak.
Gold for April delivery was recently down 0.1% at $1,330.60 a troy ounce on the Comex division of the New York Mercantile Exchange.