Financial conditions seem to have tightened more than the U.S. benchmark indexes indicate, Federal Reserve Chair Jerome Powell said during Wednesday's press conference. "The traditional indexes are focused a lot on rates and equities, and they don't necessarily capture lending conditions," Powell said when asked what financial situation would warrant an interest rate cut, especially if credit conditions were to further tighten. Concerns of a credit crunch, which occurs when banks significantly tighten their lending standards, have grown amid the banking crisis. If tighter lending conditions are sustained, Powell acknowledged that could easily have a significant macroeconomic impact which would be factored into the Fed's policy decisions. "The question for us though is how significant will that be and what would be the extent of it and what would be the duration of it," he said, adding that "rate cuts are not in our base case."

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