Federal Reserve warns: Loss of "safe haven" status for U.S. assets will have a long-term impact on the U.S. economy

According to a report by Jinse Finance, Federal Reserve officials have warned that the global trade war initiated by U.S. President Trump could have a "long-term" impact on the U.S. economy by causing the country to lose its safe-haven status. The latest Federal Reserve meeting minutes show that some rate setters noted the decline in U.S. Treasury bonds, stocks, and the dollar in the weeks following Trump's announcement of comprehensive tariffs on trade partners. The minutes stated: "These participants pointed out that the continued shift in this correlation, or the weakening of U.S. assets as a safe-haven status, could have long-term effects on the economy." The FOMC meeting in early May was the first meeting after the turmoil following Trump's announcement of increased tariffs on April 2nd, "Liberation Day." Historically, during periods of market volatility, global investors have always flocked to (rather than away from) U.S. assets.