- "Participants generally judged that the risks associated with trade uncertainty would remain a persistent headwind for the outlook," the Federal Reserve's July minutes said.
- Tariffs and generally slower economic conditions combined "could have significant negative effects on the U.S. economy," they said.
- Outside of the challenges from trade and the global slowdown, Fed officials saw economic growth as generally solid.
Federal Reserve members worried over future growth are highly concerned about the U.S.-China tariff battle, citing the issue multiple times during discussions at the central bank's July meeting.
Members spoke about trade on multiple occasions, saying it was one of the chief headwinds for the economy, according to meeting minutes released Wednesday.
"Participants generally judged that the risks associated with trade uncertainty would remain a persistent headwind for the outlook, with a number of participants reporting that their business contacts were making decisions based on their view that uncertainties around trade were not likely to dissipate anytime soon," the minutes said.
Tariffs and generally slower economic conditions combined "could have significant negative effects on the U.S. economy" while a softness in business investment was "pointing to the possibility of a more substantial slowing in economic growth than the staff projected."
The two sides have been locked in trade tensions amid a tit-for-tat tariff battle that shows no signs of letting up. The situation was one of three factors Fed officials cited in deciding to lower their benchmark interest rate by a quarter point at the July policy meeting.
Members "generally saw uncertainty surrounding trade policy and concerns about global growth continuing to weigh on business confidence and firms' capital expenditure plans," the minutes said.
Outside of the challenges from trade and the global slowdown, Fed officials saw economic growth as generally solid, with data that has been "largely positive" and an economy that "had been resilient in the face of ongoing global developments."
The minutes noted that trade was impacting the manufacturing and agriculture industries.
President Donald Trump jarred markets the day after the Fed meeting when he said he would institute tariffs on all Chinese imports in September. He has since modified that directive, delaying duties on some of the more consumer-sensitive areas until December.