The “fear and greed” pendulum is back in swing. With the Euro zone crisis pervading global markets, and volatility aftermath from the debt ceiling limit agreement, investors are in fear mode…which poses bad news for risk assets.

“The European debt crisis, the slow economic recovery in the US, and the uncertainty left by the US debt deal are leaving investors with little choice but to keep their funds invested in US Treasuries and mortgage bonds,” said Gibran Nicholas, chairman of the CMPS Institute. The CMPS Institute is Michigan-based organization that provides advisory services on real estate investments.

“Right now, it’s a tug of war between the bulls and the bears and the bears are winning,” Nicholas told Markets Media. “When the bears are winning, it’s good for mortgage rates, for instance because people go into safer assets.”

Nicholas’ optimistic does not extend towards riskier assets—even real estate investment trusts, bundled under the equities umbrella. “REITs are dependent on the overall economy, such as occupancy rates,” he said.

Concerns over inflation, the U.S. deficit will pervade long after the debt agreement reached yesterday,. The resolution eliminated chances the U.S. will default on its debt obligation, but does little to ease the fears for market participants who feel the debt to GDP ratio is the root cause for concern.

Washington’s agreement does little to mitigate fears that credit ratings agencies may downgrade the credit rating of the United States.

“It’s no panacea- it’s not something that will be a long-term fit. There is some worry over inflation in the long-run,” he said.

There will be some renewed deficit fears in the bond market and drive up mortgage rates at some point in the next few months, according to Nicholas.“A rapid change of direction and spike in mortgage rates has happened no less than three times in the last two years alone,” he said, perhaps citing the black swan events of 2008 within the mortgage industry.