By Howard Schneider
WASHINGTON (Reuters) - When is fear of inflation a good thing?
When it replaces fear of looming depression, skyrocketing death rates and the fallout from a volatile election in the world's most powerful nation.
In a somewhat unexpected but perhaps hopeful message from the U.S. Federal Reserve's latest Financial Stability Report on Thursday, the psychological landscape of Wall Street seems over the last six months to have gotten, well, more normal.
Graphic: Market worries "normalize" - https://graphics.reuters.com/USA-FED/STABILITY/ygdvzoqmapw/chart.png
As part of the report, the Fed asks two dozen market experts, including investors and academics about the top potential "shocks" facing the country.
The last version of the biannual report, in November 2020, put "political risk" at the top of the pile, followed by acute concerns that the pandemic would cause businesses to fail, that elected officials would come up short in their response and that the virus itself would resurge.
New results published Thursday showed concerns about coronavirus remained: the potential breakout of a new virus variant was cited as the top risk.
From there, however, it read like a list from the good old days with interest rate increases, tensions with China and, yes, inflation, top of mind.