The Personal Expenditure Index (PCE) only registered 3% annual growth in the month, down from 3.4% in September and in line with expectations.
"Core" PCE, which excludes volatile food and energy categories, also recorded growth of 3.5%, down from 3.7% from the previous month and in line with what economists in a Bloomberg survey had expected.
On a monthly basis, core PCE rose 0.2% in October, down from 0.3% in September.
Core PCE is the inflation measure most often cited by Fed Chairman Jerome Powell, so it's no wonder it's closely watched by investors. Before this data was released, markets had raised their expectations that the Fed might have finished raising interest rates.
On Wednesday, the market assessed a 78% chance of an interest rate cut by the end of the May meeting. A month ago, the market assessed only a 41% chance of a reduction over the same period, based on the CME FedWatch tool.
The US dollar index recorded a 0.51% strengthening to trade at 103.204 after the PCE data was released.
