When we look back on the 2008 economy, will it be the year of two halves: first half recession, second half inflation?

Based on the language in the Federal Reserve's statement today announcing that it will leave short-term interest rates unadjusted at 2 percent, it's certainly a possibility.

But for now, anyway, the risk of inflation does not seem to be so great that it's putting pressure on Federal Reserve chairman Ben Bernanke to raise rates soon, in spite of the speculation building that he will.

"The committee expects inflation to moderate later this year and next year," the Fed statement said. "However, in light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflation expectations, uncertainty about the inflation outlook remains high."

"The Committee will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability."

Many economists believe the Fed could raise rates by the end of the year as it shifts its policymaking from recession suppression to inflation deflation.

The rapid rise in energy costs and food prices is cause for worry that the core inflation figure could exceed the Federal Reserve's so-called "comfort zone" of 1 percent to 2 percent. Although the core number excludes oil and food, pricing pressures from those sectors could likely spill over to the rest of the economy.

A hike in interest rates later this year would suggest that the Fed is confident that the worst of the financial crisis is over and that the economy has skirted a prolonged period of recession.

Earlier this month, Bernanke said "the risk that the economy has entered a substantial downturn appears to have diminished over the past month or so."

But there is still evidence that this economic downturn is far from over. There appears to be no sign that the housing market is anywhere near the bottom, and the credit market remains tight as the world's biggest banks continue to work through their bloated balance sheets.

The Fed acknowledged these concerns again in its statement today.

Warren Buffett, chairman of Berkshire Hathaway, told Bloomberg today that he believes the economy will likely remain in a period of stagflation for quite a while. Stagflation occurs when the economy contracts at the same time inflation rises.