The Federal Reserve kept its benchmark interest rate unchanged Wednesday but acknowledged that inflation is beginning to creep higher.

In a widely expected move, the central bank's Federal Open Market Committee held the funds rate at a target of 1.5 percent to 1.75 percent.

However, there were several tweaks to the post-meeting statement that market participants likely will find instructive. Markets that already were anticipating that the Fed would move to a more aggressive posture this year got more to chew on.

Perhaps most significantly, the committee noted that "overall inflation and inflation for items other than food and energy have moved close to 2 percent." That was an upgrade from the March meeting in which the FOMC said the indicators "have continued to run below 2 percent."

The change is key as Fed officials consider 2 percent to be a healthy level of inflation and a key for continuing to push rates higher.



Stocks edged higher after the announcement.



"I give them credit. They didn't change a whole lot and they didn't need to," said Joe LaVorgna, chief economist for the Americans at Natixis. "The equity market is really going to dictate how they're going to be able to raise rates."



Markets have been watching the central bank for clues as to how aggressive it will be this year. Expectations heading into the meeting were for a total of three rate hikes, with a fourth given a nearly 50 percent chance.