Former Federal Reserve Chair Janet Yellen thinks the central bank is not in a position where it needs to buy equities but thinks lawmakers should give it more leeway for the future.

"It would be a substantial change to give the Federal Reserve the ability to buy stock," Yellen told CNBC's Sara Eisen on "Squawk on the Street." "I frankly don't think it's necessary at this point. I think intervention to support the credit markets is more important, but longer term it wouldn't be a bad thing for Congress to reconsider the powers that the Fed has with respect to assets it can own."

Normally, the Fed is only allowed to own government debt and agency debt with government backing, Yellen said. The central bank has also received special powers during the coronavirus outbreak to buy other assets such as corporate debt through exchange-traded funds. The Fed has also cut rates to zero and launched an unlimited quantitative easing program to help stabilize markets. Still, the Fed would need additional authority to buy exchange-traded funds holding stocks.

Other central banks — including the Bank of Japan — have been purchasing some of their countries' stocks to mitigate the recent carnage sparked by the coronavirus outbreak.

"The Fed ... is far more restricted than most other central banks," Yellen said. "Even with respect to owning corporate debt, the Fed is not allowed to directly own corporate debt and most other central banks are."

Yellen's remarks came as the number of coronavirus cases around the world nears 1.3 million, according to Johns Hopkins University. In the U.S. alone, more than 330,000 cases have been confirmed.

To be sure, New York — the state with the most confirmed cases — reported fewer deaths on Sunday than on Saturday as well as a decline in hospitalizations. Some countries in Europe also saw a slower death rate over the weekend.

This helped lift equity prices around the world. However, even after Monday's rally of more than 4% for the S&P 500, the broad market average is still down over 20% from a record set in late February. The equity landscape outside of the U.S. is just as grim. The iShares MSCI ACWI ex-U.S. (ACWX) ETF, which tracks stocks outside of the U.S., is down more than 20% year to date.

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