The Federal Reserve (FED) warns: The loss of the "safe haven" status of U.S. assets will have a long-term impact on the U.S. economy.

On May 29, Federal Reserve officials warned that the loss of safe-haven status caused by the global trade war launched by US President Trump could have a "long-term" impact on the US economy. The minutes of the latest Federal Reserve meeting showed that some rate-setters were concerned about the decline in the prices of U.S. Treasuries, equities and the dollar in the weeks following Trump's announcement of sweeping tariffs on trading partners. "These participants noted that the continued shift in this correlation, or the weakening of U.S. assets as seen as a safe haven, could have a long-term impact on the economy," the minutes said. "The FOMC meeting in early May was the first meeting after the turmoil that followed Trump's announcement of tariff hikes on April 2, Liberation Day. Historically, global investors have flocked to (rather than stayed away) U.S. assets during periods of market volatility.