Noted Federal Reserve watcher Jim Grant told CNBC on Thursday that President Donald Trump wants a Fed that would give him what he wants: "Cheap credit."

"What (Trump) wants is the Trump standard, which would feature great amounts of credit creation, very cheap credit, and very low interest rates," said Grant, founder and editor of Grant's Interest Rate Observer.

"If, for example, Jeffrey Gundlach is right as he so often is and Neel Kashkari, the very dovish Fed governor is appointed Fed chairman, that's a kind of outside-the-box call. But I think it's a provocative one," he said in an interview on "Squawk on the Street."

Grant also said Trump wants a "great, big booming economy" and therefore wants an "easy Fed."

"Bond King" Gundlach, CEO of DoubleLine Capital, said Tuesday that he believes that Trump will pick Kashkari as the next Fed chief. "(Kashkari) happens to be the most easy money guy that's in the Federal Reserve system today and that's why he may win," Gundlach argued.

Kashkari, the president of the Minneapolis Fed, said Monday that the central bank is making a mistake by continuing to raise rates, which Gundlach referenced.

However, an administration source told CNBC on Wednesday that Kashkari was not being considered for Fed chairman. The current betting favorite on Wall Street for central bank chief is former Fed Governor Kevin Warsh.

Current Fed Chair Janet Yellen's term ends in February.



The Minneapolis Fed did not respond to a request for comment.



— CNBC's Steve Liesman contributed to this story.