With Yellen unlikely to be reappointed, many traders have generally been hoping for someone like Yellen who won't raise interest rates too fast to keep the economic expansion going.
However, Sri-Kumar argued that the U.S. economy is being artificially "propelled by the excessive amount of liquidity" due to the easy money policies of the current Fed. It's time to get back to normal after nearly a decade since the 2008 financial crisis, which sparked the central bank stimulus in the darkest days of the Great Recession, he said on CNBC's "Squawk Box."
A top contender who is seen as breaking with the Yellen Fed — meaning tighter policy and less intervention — is former Fed Governor Kevin Warsh, a visiting fellow at Stanford University's Hoover Institution. Warsh was formerly a member of an advisory committee to Trump.
The stock market initially would likely falter on a Warsh appointment but thrive over the long haul, said Sri-Kumar, president of the macroeconomic consultancy Sri-Kumar Global Strategies. "The question is, do you want a more quick market sell-off, and then a take off on the economy on true fundamental basis? Or do you want push it up and then have a sharper crash later on?" He advocates for the former.
A leading candidate for Fed chair who is seen as preserving some continuity with Yellen's vision is current Fed Governor Jerome Powell, a former investment banker and partner at the Carlyle Group. Powell also served as a Treasury official under former President George H.W. Bush.
A Powell appointment would be well received by markets, said Ed Campbell, portfolio manager at Prudential Financial-owned QMA.
"I think the best outcome for markets would be Powell; dovish in that camp but also probably more of a friend of deregulation," Campbell said on "Squawk Box."
On Warsh, Campbell said: "There would be a little bit of an adjustment. They would respond poorly initially."