Checked your stock portfolio or 401(k) balance recently? If so, you likely felt a sinking feeling in your stomach and worry over what to do next. You might well have seen your balance drop a whopping 10% in recent days. If you were seduced by Bitcoin and its fickle associates, the spreadsheet likely will look worse.

The stock market has been in a free fall over the last few days, a scary succession of mounting declines. It’s not hard to identify the culprits: The world’s tardy central banks now are focused on fighting raging inflation and raising interest rates instead of flooding us with cheap money, the nature and timing of the omicron recovery remains uncertain and Vladimir Putin is threatening to destabilize the geopolitical landscape by invading Ukraine.

Not a good combination for a market that loathes uncertainty.

There is certainly an argument, made by the economist and former treasury secretary Lawrence Summers and others at the time, that President Joe Biden’s COVID-19 recovery packages flooded the economy (and the states) with too much free government money, spiking demand at a time of supply chain problems and that we are now paying the price for that excess generosity.

As we’ve noted on this page before, the progressive campaign for the $15 a hour minimum wage in Illinois and elsewhere didn’t achieve anything if that $15 merely buys less and less. And for older people who are reliant on savings, the curse of inflation running in the range of 7% or 8% is even more worrisome. If it goes unchecked, you cannot count on your hard-earned nest egg having sufficient purchasing power.

Still, when it comes to the markets, we need some context from a longer term.

Even though the recent declines have been enough to need antacids, they are (as we write) only a fraction of the gains the market enjoyed in 2021, when the S&P 500 returned almost 30%. History teaches us that such a level of annual return always was unsustainable in the long term; some solace can be found by comparing your present balance to what you had in 2019 or 2020.

We’d also argue that the coming interest rate hikes (likely as many as three in the month of March) have been priced into the market already, so unless the Fed makes a sudden divergence from conventional wisdom, which would not be desirable, those hikes should not cause further surprise. Even after the projected hikes, interest rates likely will remain very low by historical standards. It’s just that memories are short.

Putin, of course, remains a wild card, but we’re hoping the uptick in response to his aggressions will put the brakes on his empire-building. Any kind of retreat or other good news for Ukraine likely will be a boost for the market.

Most of all, though, we still see a recovery coming as the omicron variant stops burning through the population, not a recession. Logic suggests this must swell the bottom lines of a variety of companies, many of which have been suffering from moribund demand. Not long ago, there was talk of the roaring ‘20s. That was likely an overstatement, but the likelihood remains of a market-friendly expansion in economic activity.

Certain hard truths are being faced and we say it is better to do so right now. Unprofitable companies are just that and not necessarily deserving of unconditional market support. The demon of inflation clearly was underestimated by the Biden administration, which got far too used to words such as “transitional,” and must be dealt with before the fiend wrecks further damage.

Investors, especially young ones, have become far too used to returns that defy logic, not just in the stock markets but also in the property sector, where the huge gain carousel of 2020 and 2021 must also one day come to a halt. Be warned if you are buying at the top.

The eye-popping returns on digital currencies, the poster children of risky assets, have similarly defied logic, and it’s hard to argue that the current correction was not long on the horizon. Instability makes up the bed there, and those who choose to lie on it have to be aware.

Markets thrive first and foremost on profits, even if the doings of governments often seem to take the leading role. And it would help the situation for the Biden administration to acknowledge that truth.

We think Fed Chair Jerome Powell is correct when he says that the drag on revenues will be temporary. He could certainly further reassert that truth to calm the market this week, even if he shouldn’t shirk from his duty to curb inflation. He can fulfill his obligation to support strong employment numbers and stable prices while still reassuring investors that the Fed is not in the middle of some panicky downturn from a colossal miss on inflationary dangers.

Powell has a tough needle to thread, and there will no doubt be pressure from the White House, which has to deal with dismal approval ratings for the man in charge. But Powell’s job is to help the economy, not shore up Biden.

The salient questions going forward are whether this group of leaders can wrestle inflation to within manageable proportions without sending us into a recession, and whether American business can control costs, feed demand and operate profitably this spring as this nation emerges from its collective basement and goes out to spend money.