Trump's eventual Fed chief is still going to be 'very dovish,' Jim Grant says

Market's two paths: Jim Grant

President Donald Trump will draw on his roots as a "leveraged New York City real estate speculator," when making a decision on who should lead the Federal Reserve, closely followed market newsletter editor Jim Grant told CNBC on Thursday.

"My guess is he's going to put someone in who's very dovish," the founder of Grant's Interest Rate Observer told "Squawk Box," speculating on the type of person Trump may pick should he choose to replace current Fed Chair Janet Yellen.

Grant said, "[Trump] is a former leveraged New York City real estate speculator who loves low rates, and who loves big real estate projects and growth. And he wants somebody who's going to finance it."

If interest rates were to remain historically low, increasing the national debt to offset the cost of his promised $1 trillion in infrastructure projects would not hurt as much because borrowing would be cheap.

During the campaign, Trump made it clear he's no fan of Yellen, who's actually seen as quite a dove herself. Trump had said she was politically motivated to keep interest rates low to continue to support the economy to burnish then-President Barack Obama's legacy.

Yellen, who repeatedly denied candidate Trump's accusations, has expressed the desire to finish out her four-year term, which expires next February.

Grant said he voted for Trump as a "short sale" on Democrat Hillary Clinton, calling the billionaire "the second-worst candidate." He added that voting for Trump was actually a vote of confidence in his running mate and now vice president, Mike Pence, a former GOP governor and ex-congressman who knows his way around Washington.

"It was [also] a vote for the prospective rolling back of the administrative state. It was a vote for perhaps for rule under law. It was perhaps a vote for growth, and for markets and enterprise," Grant said.

He compared the Trump presidency to a stock that everybody is shorting, or betting against. "It's curious that this metaphorical stock keeps climbing this wall of worry or indeed of loathing."

"So maybe the market senses something that many of us watching Donald Trump don't," Grant speculated. "The market is set up for Donald Trump's success, notwithstanding the virtually unanimous sentiment you read in the papers."

Grant was taking a swipe at the media, accusing news organizations at large of a negative Trump bias.

But Grant said, "Trump is the avatar of tail risk. He is personally the expression of possible disparate extreme outcomes," warning that in the long run he sees Trump as being really good for the market or really bad.