WASHINGTON — Kevin Warsh will hold his first press conference as Federal Reserve chair on Wednesday. His reform agenda for the central bank includes moving toward lower interest rates, reducing the central bank's balance sheet, and changing how it approaches inflation.

Financial markets anticipate the Fed will hold interest rates steady this week. During his April confirmation hearing, Warsh stated he is willing to listen to the president and others regarding interest rates, but the central bank ultimately makes the final decision.

The Fed operates independently by statute and reports to Congress. "Humble central bankers should be listening and then making their own decisions." Warsh said. President Donald Trump previously demanded an immediate interest-rate cut from the Fed. Former Fed Chair Jerome Powell stated that interest-rate decisions are based solely on economic factors.

The Fed maintains a target to keep core personal consumption expenditures inflation below 2%. The most recent core personal consumption expenditures inflation reading was 3.3%. Fed Governor Christopher Waller stated in May that interest rate hikes may be necessary if inflation does not decrease. Fed officials, including Dallas Fed President Lorie Logan and Cleveland Fed President Beth Hammack, indicated that interest rates may need to increase this year.

The current main policy statement from the Fed includes language indicating a preference for additional interest rate cuts. Three Fed members dissented at the April meeting regarding the removal of the policy statement's rate cut preference. Financial traders currently expect at least one quarter-point interest rate increase this year.

The Federal Open Market Committee consists of 12 voting members, including the president of the Federal Reserve Bank of New York, four rotating regional bank presidents, and seven Board of Governors members. "The chair has considerable leeway. A chair who chooses to push too far in any one direction is going to both run into trouble with the board or the committee, whichever is relevant." said Jon Faust, an economist at Johns Hopkins University. U.S. Labor Department data for May reported 172,000 jobs created and an unemployment rate of 4.3%. The Iran war has increased U.S. energy and gasoline prices.