ClearBridge had $155.2 billion in assets under management as of Sept. 30.
George Ball, chairman of Sanders Morris Harris, an investment firm with $4.9 billion in AUM, said that while consumer prices remain elevated, "it's only a matter of time before we see inflation data move back to the Federal Reserve's 2% target."
Tuesday's inflation numbers, Ball noted, likely don't change the Fed's calculus on interest rates, "which at this point consists of an interest rate pause, and a low likelihood of near-term rate cuts."
The Bureau of Labor Statistics reported Dec. 12 that the consumer price index rose 3.1% from a year ago in November, matching economic forecasts, slightly below the 3.2% figure recorded in October.
Economists were expecting a 3.1% annualized CPI figure for November, according to financial data firm FactSet Research Systems.
Excluding the volatile food and energy sectors, core CPI rose by an annualized 4% in November, the same such pace as reported in the prior month.
The Fed considers the inflation rate a key factor in its monetary policy.
The Fed's key short-term interest rate is now in a range of 5.25% to 5.5% — after the central bank kept rates unchanged at its Nov. 1 meeting.
As of the morning of Dec. 12, according to CME Group's FedWatch tool, shortly after release of the CPI data, market participants' pricing of fed fund futures indicated there is an 98.5% probability that the Fed will again keep rates unchanged when it issues its next monetary policy decision Dec. 13, and only a 1.5% probability it will cut rates by 25 basis points.
Ball also said the market will focus on Fed Chairman Jerome Powell's rhetoric after the Dec. 13 rate decision is announced.
"We expect him to communicate hawkishly by throwing cold water on the idea of rate cuts in 2024," Ball said. "We expect interest rates to remain elevated for some time."
Mark Heppenstall, president and chief investment officer of Penn Mutual Asset Management, said he thinks at the Dec. 13 news conference, Powell "is unlikely to deviate from recent messaging that more work needs to be done to fight inflation."
Penn Mutual has $30.7 billion in AUM.
John Luke Tyner, portfolio manager and fixed income analyst at Aptus Capital Advisors, commented that the "robustness" of the job market is keeping inflation up.
"Labor and wages continue to rise, giving people both a job and higher pay," he said. "In order to see a sustained shift lower in inflation, we'll likely need a shift higher in unemployment."
Tyner added that the Dec. 12 CPI report likely "extinguishes any chance" of first-quarter 2024 rate cuts as inflation continues to linger.
Aptus has about $4.3 billion in AUM.
