US central bankers are trying to keep the economy on a sustainable path as growth gets a boost from tax cuts and additional government spending, with a "few" Fed officials saying in the minutes that fiscal policy "posed an upside risk" to the outlook.
"[Some] indicated that plans for capital spending had been scaled back or postponed as a result of uncertainty over trade policy".
Economists said the minutes of the June discussions did not alter their overall view of what the Fed would do this year.
The Federal Reserve's meeting minutes stood out with expressing more significant concerns on trade. The bank made three rate hikes previous year and one in December 2016. The Fed dropped language it had been using for a number of years promising to keep rates at levels that would boost economic growth "for some time".
The change was made because officials believed it "was no longer appropriate in light of the strong state of the economy and the current expected path for policy", the minutes said. The projections have the funds rate rising to 3.4 percent by the end of 2020.
Despite current growth prospects and inflation finally reaching the Fed's goal of 2 percent annual gains in prices, the minutes noted a number of "risks and uncertainties" facing the economy. As from midnight on Friday, the first wave of USA tariffs will apply to 818 Chinese goods ranging from boat motors to LEDs and radio equipment.
The U.S. has imposed tariffs on imported steel and aluminum and threatened to slap more levies on other products from some of its biggest trading partners, particularly China and the European Union.
American businesses have already begun showing signs of slowing or halting global investments amid President TrumpDonald John TrumpChelsea Handler issues July 4 apology to world: "We're sorry about our president" USA pork producers prepare for steep tariffs: "I don't want to be the patriot who dies at the end of the war" ACLU membership grew from 400,000 to 1.84 million after Trump was elected: report MORE's escalating tariff actions against various countries, including top U.S. allies. He said the following week that, in principle, " changes in trade policy could cause us to have to question the outlook", adding that business contacts were telling the Fed it might be a reason to delay investment or hiring.
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