A new crisis in the Middle East does not seem to have frightened anyone, neither investors nor Central Banks. The former continue to buy stocks, while the latter reiterate their dovish stance.

It seems that everyone has decided that the conflict will not last long, that the recent spike in energy prices will not significantly impact inflation and that there will be no recession.

However, the facts tell a different story. Let's start with the impact of higher oil prices. For those who missed it, the deflationary trend slowed in August and probably in September due to the rise in gasoline.

So it should come as no surprise that analysts at JPMorgan and former U.S. Treasury Secretary Larry Summers fear a new wave of inflation similar to that of the 1970s and 1980s. In other words, the Fed's work may not be done yet.

Of course, it is not entirely accurate to draw a direct parallel with what happened 50 years ago, as it is improbable that OPEC will repeat the OAPEC decision to impose an embargo on those who support Israel in the conflict. No one wants to get into that now.

However, companies could take advantage of this upturn in uncertainty to raise prices, just in case. As the saying goes, strike while the iron is hot. So, it is too early to celebrate victory over inflation.

On the other hand, it is essential to note that the end of the rate hike cycle does not equate to a monetary policy review. Neither the general population nor businesses will have an easier time without the former.

Incidentally, corporate bankruptcies are already growing at record rates since the pandemic: according to S&P Global, 459 companies had filed for bankruptcy at the end of August.

Globally, the situation is no better: there were 107 corporate debt defaults in August, the highest monthly total since 2009. And given the actions of central banks, this figure will likely continue to rise.

Tighter lending standards, increased operating expenses and reduced pandemic support programs also add to business challenges.

Not only entrepreneurs but also the real estate industry and the banking sector are feeling the adverse effects. In particular, the real estate sector is suffering from declining demand due to the rising cost of servicing debt.

According to Bankrate, the average interest rate for a 30-year mortgage currently stands at just under 8%, the highest since June 2000. In addition, the median home price stands at $407,100.

In the banking sector, the 25 largest U.S. banks have experienced a significant slowdown in loan growth, with only 1.5% growth, down from 8% a year earlier.

In addition, banks are under pressure to offer higher savings rates to retain customer deposits, which are their primary funding source.

Moreover, the U.S. government's attempt to sell nearly $13 billion in mortgage bonds purchased from failed lenders Silicon Valley Bank and Signature Bank could destabilize an already weak market.

In conclusion, there is enough reason to worry even without a war in the Middle East. Although a stock market collapse is not guaranteed, there is a high probability that it will occur.

When considering potential assets that could benefit from a market turnaround, U.S. Treasuries look more attractive than gold (XAUUSD), particularly TMF or TLT.