STORY: Continued Rathbun, "The Fed has definitely been getting softer on the rhetoric, the hawkish rhetoric, but it's still hawkish - and the other number that came in today is the initial jobless claims, which is a leading indicator for the labor market, and it came in very, very low.... So we're looking at a really tight labor market - some would call a healthy labor market - and that gives the Fed more room to work on inflation."

Money markets are pricing in a 25-basis-points rate hike by the Fed next week, with a terminal rate of 4.9% in June, still below the 5% rate backed by many policymakers.