The Fed sees improving economy but keeps rates low

The economy is showing signs of improvement, the Federal Reserve said Wednesday. But that doesn't mean an interest rate hike is around the corner. The Fed said it would keep its benchmark rate "exceptionally low" for an "extended period of time."

"Economic activity has picked up following its severe downturn," it said in a statement after its rate-setting Federal Open Market Committe meeting concluded on Wednesday. "Conditions in financial markets have improved further, and activity in the housing sector has increased." But challenges, including rising unemployment, tight credit and falling business investment haven't disappeared, and could stand in the way of a recovery, the Fed said.