Considering the much improved state of the economy, the Fed statement was very much on the dovish side. There was one modest upgrade to the economic outlook in the first paragraph with the addition of this sentence: "Measures of consumer and business sentiment have improved of late."
As for inflation, while it appears there was a modest boost to the inflation outlook by saying "inflation will rise to 2 percent over the medium term" the Fed also said that "market-based measures of inflation compensation remain low."
For many, that effectively took March off the table. Fed funds futures for March showed odds of a March rate hike falling to 22 percent from 29 percent before the statement.
Even if a rate hike was unlikely in March, I was a bit surprised they didn't at least raise the expectations a bit.
After all, the Fed has plenty of cover to finally reduce its accommodative policy...