On Tuesday Wall Street was buzzing about a congressional plan to audit the Federal Reserve's decision-making process -- and whether it poses a threat to our financial future.
In a live interview on CNBC, Fed official Frederic Mishkin took issue with the plan being touted by Rep. Ron Paul, a Texas Republican and leading Fed critic.
"This is I think the most serious attack that I've seen on the Federal Reserve in the many, many years that I've studied it as a scholar," said Mishkin, an economist at Columbia Business School who was affiliated with the Fed in various capacities from 1994-2006. "This is really dangerous stuff."
- See the full video of Mishkin's comments here
Paul's plan would require the General Accounting Office to audit Fed decisions within a year of the bill's enactments.
He has said the move would ensure the central bank is being held accountable for its decisions but rejected notions that the audits would compromise Fed independence.
- See video of Paul discussing his plan with CNBC
Mishkin said history has shown that when lawmakers try to inject politics into the Fed, bad decisions are made and inflation often occurs as governors are pressured to keep interest rates low. Former Fed governor Randall Kroszner appeared on CNBC Monday and voiced similar concerns.