The Federal Reserve is expected to hold interest rates near zero on Tuesday and renew its pledge to keep rates very low for a long time, but it could note a brightening economic picture and hint at being closer to dropping the vow.

The Fed opened a one-day policy meeting at around 8 a.m., a Fed spokesperson said. A statement is expected around 2:15 p.m..

Analysts widely expect the central bank to say again that high unemployment and low inflation warrant holding borrowing costs exceptionally low for an extended period.

The Fed has held benchmark rates near zero since December 2008 to cushion the economy and help it recover from the most severe financial crisis in generations.

The economy has shown signs of momentum, albeit uneven, in recent weeks, and markets will look closely at how the Fed characterizes the outlook for any signs that policymakers may modify the low rate promise at the central bank's next meeting in late April.

Fed officials will have to see through the impact of the blizzards that ground parts of the country to a halt in February. U.S. housing starts and permits to build new homes fell in February as home building was disrupted, a government report showed on Tuesday.

The Fed could acknowledge gains in retail sales and signs labor market carnage continues to ease. Indications that consumers -- a primary driver of the world's largest economy -- are starting to participate would be an important harbinger of recovery.

Early this month the Fed's Beige Book summary of economic conditions around the country, based on data collected through late February, said economic activity strengthened modestly across most of the 12 Federal Reserve districts.

Still, senior Fed officials have said in recent appearances the recovery continues to be tepid and suggested rate increases are far off.

Notwithstanding the positive signs, the job market remains quite weak, Bernanke said in semiannual monetary policy testimony before Congress on February 25.

The Fed is also likely to note it plans to let its asset-buying programs end this month, as scheduled, but it could leave the door open to more purchases in the future if another dose of medicine is needed for the economy.

The vast majority of the primary dealers, which deal directly with the central bank in the markets, do not anticipate any change in the Fed's extended period language until the April 27-28 meeting at the earliest. Most do not see an interest rate increase until the second half of this year.

It would be a big surprise if the Fed did anything today. They remain very concerned about the state of the economy, since employment remains dreadful and consumers are cautious, said Gary Shilling, president of A. Gary Shilling & Co of Springfield, New Jersey.

(Additional reporting by Ryan Vlastelica in New York; Editing by Neil Stempleman)

Federal reserve Ben Bernanke