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Stephen Dunphy / Times staff columnist
The Newsletter: Pressure is on the Fed

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A lot of talk last week in New York about the Federal Reserve and when it might raise interest rates. With the economy apparently growing quite well now, even producing some jobs, the pressure is on the Fed to act.

The futures market indicates traders believe the increase from the current level of 1 percent will come at the March or May meetings of the Fed's Open Market Committee, the main policy-setting group. But some economists also say low inflation and slow job growth give the Fed some room to hold off on an increase.

Then there's the politics. Raising rates in an election year could create a dilemma for the Fed and Chairman Alan Greenspan. Former President George Bush believes he lost the 1992 election in part because the Fed was slow to lower rates as the economy improved.

No one expects anything to happen until spring. A March-May increase could be the most likely path, necessary because of economic growth, but far enough from next November that it stays out of the politics.

Keep this in mind about Boeing layoffs. While it is devastating to the individual, the huge pool of workers here could be one of the wild cards that lands the 7E7 in Washington state. Ask yourself this question: Where else in the country — the world, even — are there so many highly skilled aerospace workers?

The big California grape crop looks a bit smaller than the year before with prices continuing to fall. The Wine Institute, a San Francisco-based winery trade group, estimates the 2003 wine-grape crush will come in at 3.05 million tons, down slightly from 3.1 million tons in 2002.

Growers and wine experts say the grape quality could be the best in years. But growers faced sliding prices in recent years despite quality grapes.

In 2002, wine-grape prices fell 11 percent from the previous year, according to the state Department of Food and Agriculture. The average price for all varieties was $537.49 a ton, down from $600.59 in 2001. Experts expect that trend to continue this year.

The Fairmont Olympic Hotel, previously the Four Seasons Olympic Hotel, was awarded AAA's Five Diamond designation for the 20th consecutive year. Washington's only other Five Diamond winner for 2004 is The Herbfarm Restaurant in Woodinville, achieving the award for the second year.

The award is a prestigious one.

There are only 82 lodgings and 55 restaurants in the country on this year's list.

Pacific Lutheran University's Family Enterprise Institute is an acknowledged national leader in the family-business arena. That makes its annual Northwest family-business awards all the more important.

Winners this year by category: Small Business, fewer than 50 employees, Deeny Construction, Seattle, and the Revere Group, Seattle, co-winners; Medium Business, 50-250 employees, Canlis Restaurant, Seattle; Large Business, more than 250 employees, R.D. Merrill Co. & Merrill Gardens, Seattle; New Business, less than 10 years in the family, Cozza Optical, Spokane; and Heritage Business, more than 50 years old, McGregor Company, Colfax, Whitman County.

Founded in 1882, McGregor provides fertilizer, seed, agricultural services and technology to farm families in Eastern Washington.

Stephen H. Dunphy's columns appear Tuesdays-Fridays and Sundays. Phone: 206-464-2365. Fax: 206-382-8879. E-mail: sdunphy@seattletimes.com. More columns at www.seattletimes.com/columnists

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