It announced the policies in a statement after its first meeting with Janet Yellen as chair.
One reason for dropping a threshold unemployment rate, as Yellen among others have noted, is that the rate can overstate the job market's health. In recent months, for example, the unemployment rate has fallen not so much because of robust hiring but because many people without a job have stopped looking for one. Once people stop looking for a job, they're no longer counted as unemployed, and the rate can fall as a result.
The Fed's previous statement had said it planned to keep short-term rates at record lows "well past" the time the unemployment rate fell below 6.5 percent. The rate is now 6.7 percent. Several Fed officials had recently suggested scrapping the 6.5 percent threshold and instead describing more general changes in the job market and inflation that might trigger a rate increase.
Investors have been speculating about when the Fed might raise its short-term rate, which would elevate borrowing costs and could hurt stock prices. On Wall Street, stocks fell modestly in the first few minutes after the Fed's statement was released.
More than five years ago, the Fed cut its benchmark short-term rate to a record low near zero, where it's remained since. Most analysts think the Fed will keep its target for short-term rates near zero until mid to late 2015.
The Fed also updated its economic forecasts Wednesday. Fed officials expect the U.S. economy to grow at a steady if modest pace in 2014 despite weather-related setbacks this winter.
The Fed is forecasting growth of 2.8 percent to 3 percent this year, a bit lower than its December projection of between 2.8 percent and 3.2 percent.
The forecast suggests that Fed policymakers will continue to pare their monthly bond purchases, which are intended to stimulate growth by keeping interest rates low. It is doing so despite challenges the U.S. economy and financial markets face, from a brutal winter that's depressed growth, to fears about how Russia's aggression toward Ukraine might slow the global economy.