Federal Reserve Chair Janet Yellen speaks during a news conference December 13, 2017 in Washington, DC.
Getty Images
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 them more leeway for the future.
“It would be a substantial change to give the Federal Reserve 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.”
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.
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 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.
This is breaking news. Please check back for updates.
Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.