The Fed believes that trade is the main reason why the economy is slowing

• The minutes of the Federal Reserve interest rate fixing meeting in July show that policymakers blame the slowdown in the US economy for the trade quarrel between President Trump and China and other countries.
• Fed officials also said trade uncertainty was behind the recent drop in business investment in the United States.

While President Donald Trump rejects his theory that the US Federal Reserve is the main reason for the slowdown in the US economy, Fed policymakers are starting to retreat.

In a series of tweets, Trump again attacked the US central bank and its chairman, Jerome Powell, for failing to cut interest rates enough, which, according to the president, stifles economic growth.

However, in notes released at their July meeting, released Wednesday, Fed officials repeatedly cited the Trump administration's growing trade war with China and other countries as the main reason why the American economy was threatened.

Fed officials also said trade uncertainties were a major factor in the recent drop in fixed investment in US firms, a key factor that Trump and his economic advisers cited as proof that economy is stronger than under President Obama.

The Fed account does not mention Mr. Trump directly. But the word trade appears 32 times in minutes, though not everything is negative. The Fed has repeatedly noted that easing tensions between the United States and China in July helped the economy. Early August, Mr. Trump pointed out that he was going to impose new tariffs on China, although the President has since delayed the entry into force of these tariffs.

A disturbing trough in business investment

Business investment has been a key measure for Trump and his advisers, arguing that the economy has been greatly accelerated under his watch and that the massive tax cuts that are being made by the US government and the state of the economy. He had passed in late 2017 had been a success. Last summer, the president noted that business investment was growing at an annual rate of 9%, which he described as a "significant increase" that had not been observed since " many, even decades. "

Business investment can be important for future economic growth, but its impact is less obvious when it comes to predicting a recession. Consumer spending accounts for 70% of economic activity. And in an advanced technology-driven economy, based on information and assets, capital spending by traditional firms may be less important than before. But business investment can be useful as an indicator of the economic mood of American businesses.

In any case, last year's increase in business investment was less sustainable than expected by Trump – at least in the eyes of the Fed, because of trade tensions in the United States and in the world. The annual growth rate of business investment has been reduced to 1.4%, compared to the 9% rate previously mentioned by Trump. On top of that, the New York Times noted on Wednesday that fixed corporate investments are now below the CBO's April 2018 forecast since last fall.