(Reuters) - The U.S. Federal Reserve will continue cutting interest rates in November, but policymakers are walking a thin line as inflation is no longer cooling at an accelerated pace, Morgan Stanley Wealth Management's chief investment officer said.

The Fed is focused on a labor market that has shown evidence of being "mixed in pockets", Lisa Shalett told the Reuters Global Markets Forum (GMF).

"They're not going for the 2% (inflation) target; they've abandoned it," she said.

Most Fed policymakers last week gave the green light for more rate cuts in coming months, while Atlanta Fed President Raphael Bostic said skipping a move in November may be in order.

"The equity market hasn't woken up to that yet, but the bond market looks like it's starting to back up on the long end as higher inflation expectations are being discounted," Shalett said.

Data last week showed U.S. consumer prices rose slightly more than expected in September and producer prices were unchanged last month.

Traders currently have 89% odds on a 25 basis-point rate cut at the Fed's Nov. 6-7 policy meeting, abandoning expectations for a half-point cut after a blowout September employment report and other rosy economic data.

Meanwhile, Shalett said she does not expect a clear outcome on Nov. 5, the day of the U.S. presidential election, given how close the race is.

Last week's polls had Democratic Vice President Kamala Harris and former Republican President Donald Trump neck-and-neck across seven battleground states.

"We've encouraged clients to anchor position in what we call real assets ... including gold, commodities, real estate, energy infrastructure assets," Shalett said, to "hide out" from rising market volatility.

"We also like market-neutral hedge fund strategies," she added.

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