The firm argues that the risk for that may be "substantially higher" than what many market participants are expecting
In a note, BofA economists argue that they see "intervention risks rising if the dollar pushes to new highs in disorderly market conditions, particularly on safe haven-related flows".
Adding that "comments by administration officials suggest an ongoing softening of the 'strong dollar' policy, which Munich now refers to as being relevant over the long-term".
As for the Fed decision later today, they view that the US central bank is likely to cut interest rates by 25 bps and guide markets towards more "insurance cuts" in the coming meetings.
For those unaware, the Fed may be in charge of implementing policies in the US but it is up to the Treasury to decide on what sort of dollar policies that should be pursued.
As such, you can gauge the bias here from Trump's remarks on the dollar but I reckon we're still some way off before we reach the intervention stage. That said, verbal intervention has already somewhat begun and as long as the dollar remains the best of a bad bunch, it could potentially threaten Mnuchin (on Trump's orders) to pull the trigger.
