By the time you read this I will have celebrated my first year of retirement.  A wonderful year it has been!

Wiring, plumbing, demolition and construction projects went better than expected. (Well, most of them.) Plus, a week in the Caribbean with my wife — thank you Cox Automotive for the retirement gift.

For you still in the automotive industry, it was also likely a good year.  New-vehicle sales remained strong, used-vehicle sales rose, and used-vehicle pricing and residuals performed better than expected. 

Sure, gross margins got skinnier, but that was a given. It’s been a half- century trend, after all.

But what about the future? Right now, I have the largest and healthiest-looking garden I have ever had.  (Retirement allows one to apply more labor of love.) 

We have already had the immediate gratification of lettuce, radishes and strawberries, but the big stuff (peas, beans, squash, cucumbers, potatoes and tomatoes) is yet to come.  

Given their number, size and health, I can pretty much predict the output. As such, I’m bringing out the canning supplies. But, like the auto business, there can always be an unpleasant surprise. Ever see what a hail storm can do to a garden? Unfortunately, I have.  

So, to mix metaphors, as well as biological taxonomy, “never count your chicks before they hatch”. Most dealers have some form of hail  insurance, but none have insurance for a hell  of a turn in the economy.  

But what is to fear about an economy that by all accounts is more likely to accelerate than decelerate?  As always, there are unknowns, and the impacts will likely be transmitted through the financial markets.  Remember, “irrational complacency” is as dangerous as “irrational exuberance”.

The Federal Reserve took extreme measures in 2008 and 2009 in response the financial crisis. Everyone acknowledged — and accepted — that we were sailing into uncharted seas. Well, we’ve been sailing for a decade now.

Have the seas suddenly become charted? Judging from certain market responses, I think not.

For example, speaking of anniversaries,  we just had the fifth anniversary of what became know as the “taper tantrum” — when financial markets reacted negatively to the Fed’s  announcement that they would no longer be  adding liquidity to the economy through asset purchases. Ten-year Treasury yields surged to nearly 3 percent. 

Since then the Fed has actually withdrawn funds through a gradual reduction in its balance sheet and instituted six quarter-point hikes in the targeted federal funds rate (as of this writing in late May). The result?

Ten-year treasury yields remain where they were five years ago, and the 10-year/two-year spread has narrowed from 250 basis points to less than 50 basis points. In fact, it has been the rise in 10-year Treasury yields over the past several months that has given the Fed some flexibility. The Fed never wants to be responsible for inverting the yield curve.

Does that mean “the tail is wagging the dog”? Quite the opposite. Despite the press’ minute dissection of every Fed action, comment and meeting transcript, they are the tail. Financial markets are the dog. 

The dog is not as restful as he appears. He can not help but whiff the smells of Italy and Spain.  Political problems added to financial problems that were never addressed.

This commentary is not meant to suggest impending doom. Indeed, the positive consensus outlook is likely correct. But, as in gardening and life, give thanks for, and  enjoy, today’s bounty while also praying, and working for, tomorrow’s.

Tom Webb is the former chief economist for Cox Automotive, Manheim and NADA. He can be reached at tomwebb1950@gmail.com and on Twitter: @tomwebb1950