Despite the US inflation rate hitting its lowest point in three years, financial markets haven't reacted, even as investors anticipate a potential interest rate cut from the Federal Reserve. The crypto market, in particular, has remained largely unaffected by the news, with Bitcoin, among others, quickly recovering from a brief dip.

The muted response in the cryptocurrency market to the inflation report can be attributed in part to growing investor interest in the bond market and the looming storm of the US presidential election. Harris' strong performance in recent debates has reignited hopes of a Democratic victory in the White House, seen as a potential harbinger of dovish monetary policy. Conversely, a Trump reelection could lead to increased government spending and, subsequently, upward pressure on interest rates.

US Treasury yields have been among the first to be impacted by this shift in investor sentiment. This sudden change in market sentiment indicates a significant change in investor attitudes, fueling pessimism about the economy and widespread expectations of declining borrowing costs. Market observers say caution remains the dominant sentiment in the market. Investors are holding back, choosing to wait for clearer signals before readjusting their portfolios.