The Federal Reserve on Wednesday left its benchmark interest rate unchanged, citing resurgent inflation driven by higher energy prices stemming from the Iran war.

The Federal Open Market Committee (FOMC) kept the federal funds rate, which affects borrowing costs for consumers and businesses, in its current range of 3.5% to 3.75%. Economists had widely expected the central bank to keep rates steady. 

This week’s meeting is the first presided over by new Federal Reserve Chairman Kevin Warsh, who was picked by President Trump to succeed former chair Jerome Powell.

Investors and economists will be closely watching Warsh during his 2:30 p.m. ET press conference for indications of how he plans to keep the U.S. economy on track, as well as his outlook on inflation and the labor market. 

Mr. Trump had repeatedly pressed Powell, whose term as Fed chief ended in May, to lower interest rates. But with U.S. inflation at its highest level in more than three years and well above the Fed’s 2% annual target, many economists expect the FOMC to remain on the sidelines through year-end.

“Warsh has two immediate jobs at this first meeting: getting the FOMC and the broader Fed leadership aligned with his vision going forward, and making sure the markets have confidence in what he’s doing,” said Hank Smith, head of investment strategy at investment firm Haverford Trust, in an email before the meeting. 

Smith added, “This is not the environment for a rate cut or a rate hike — it’s an environment for ‘steady as she goes’ — and I’ll be listening for whether he projects that kind of discipline and team-building in his first press conference.”

—This is breaking news and will be updated.