The dollar index stabilized around 97.8 on Friday after facing heightened volatility earlier in the week, with markets viewing the US government shutdown as having little immediate economic impact, though it added to broader concerns over policy uncertainty, inflation risks and labor market softness. Treasury Secretary Scott Bessent warned Thursday that the funding lapse could weigh on GDP growth, while President Donald Trump threatened sweeping federal layoffs to pressure Democrats. On the monetary front, Dallas Fed President Lorie Logan said last month’s rate cut was an appropriate step to guard against sharper job market deterioration, but noted the slowdown has been gradual and signaled little urgency for further easing. Still, markets are nearly fully pricing in another 25 basis point cut this month, with another reduction expected by December.