On April 29, new data indicated that core PCE (personal consumption expenditures), a core indicator of inflation tracked by the Fed, increased to 3.5 % from 1.7 % in the first quarter the second-fastest rate of rising since 2011.

The Bureau of Labor Statistics then issued updated Consumer Price Index (CPI) data on May 12 that showing a 4.2 % increase in the all price index prior seasonal adjustment.

The figures verified what so many market experts had suspected for some time: inflation is on the rise. The main question today is whether this inflationary period is "transitory," as the Federal Reserve argues, or if it is permanent.

There are specialists on both sides of the debate who make compelling arguments.

Mohamed El-Erian, Allianz's senior economic counselor and president of Queen's College, Cambridge, told CNBC in early May that he thinks inflation isn't as temporary as the Fed implies. He cited growing commodity prices, Warren Buffett's views on pricing, and rising CPI and core PCE numbers as proof for his conclusion.

In contrast, Beth Ann Bovino, chief economist at S&P Global Economics, recently stated in a study that she believes the current increase in inflation is just temporary.

As per Bovino, inflation is linked to a "base impact" from pandemic-depressed prices in 2020, and a near-term price increase due to supply and labor shortages.

Insider contacted some experts to provide a more comprehensive picture of the reasons for and against "transitory" inflation.

Hear what they had to say:

Gautam Khanna is a senior portfolio manager at Insight Investment, which manages $1.03 trillion in assets.

"We believe with the Fed that the current inflationary surge will be substantial in the short term but eventually temporary. It is the result of base effects (the CPI statistic is being compared to a year ago - during the peak of the lockdowns), pent-up demand, and supply chain disruption."

As per Gautam Khanna, we are now in a "deflationary period" characterized by three key drivers: ageing demography, technological innovation, and global commerce.

As per Khanna, inflation will be there for the following two to 18 months, but deflationary pressures will send things to normal.

During this era, Khanna anticipates bouts of volatility and potential prospects to "buy the dips."

The senior portfolio manager believes that government bond rates will not rise in response to rising inflation, but that "fiscal and monetary growth presently occurring both represent a real threat to this theory."

"Longer-term secular tendencies that have kept inflation and productivity down are expected to re-establish themselves," Khanna added.

"Remember that previous to COVID, the unemployment ratio in the United States was 3.5 % (below predictions of the 'natural' rate), the economy was expanding, and yet we were still failing to meet the Fed's 2 % average inflation objective. Since the epidemic, nothing has altered "He continued.

Dr. Wayne Winegarden, Pacific Research Institute senior fellow in business and economics

"There is an increasing danger of sustained rising inflation." The Federal Reserve has an unproven method of controlling the money supply, so I'm not certain that they would be able to control the inflationary pressures caused by their recent activities."

Add to this the Fed officials' stated resolve not to act anytime soon, and you have a formula for high inflationary pressures and increasing interest rates later in 2021 and then into 2022."

Dr. Wayne Winegarden believes the Fed is "behind the curve" when it comes to combating inflation.

Winegarden pointed out that the Fed's latest monetary policies, such as so-called quantitative easing (QE), haven't been put to the test. He further questioned if Fed Chair Jerome Powell is overconfident, if not "arrogant," in his belief that inflation can be readily managed.

This reflects El-remarks, Erian's in which he stated that the Fed requires to have "humility" in its response to these challenges.

Winegarden went on to say that he feels the Fed must be contemplating to abandon quantitative easing measures but instead has stated that they will be simply thinking about starting to debate the possibility.

The senior scholar at the Pacific Research Institute also observed that the Fed keeps looking retrospectively at economic statistics rather than predicting changes and paying attention to experts who anticipate inflation on the ground level.

"That is what worries me the most. You can see it (inflation) in the CPI, lumber and other commodity prices, and property prices, since you can notice the problem wherever you look "Winegarden said.

"We've seen a quadrupling of the Fed's balance sheet, and I think the capacity to manage inflation in that sort of environment is tough, and that's what keeps me awake at night," he continued.

Winegarden finished by predicting that inflation will rise in the second half of the year, forcing the Fed to reduce asset purchases and raise interest rates.

Eric Leve is the chief investment officer at Bailard, a wealth and investment management organization based in the San Francisco Bay Area.

"The present episode of inflation is expected to be brief. Inflation is generally the outcome of using the economy's resources much beyond capacity, forcing the price of those remaining existing resources to increase (labor, machinery, commodities). This is most emphatically not the situation right now. Capacity utilization in the United States is 74.9 %, which is still considerably behind the global average of 76.9 % Pre-COVID level."

As per Insider, Eric Leve, he reckons inflation will be brief. Leve said that the May 12 CPI report revealed "pressures in commodities whose prices change fast rather than those that likely to become entrenched inflation."

As per Leve, growing expenditures can be attributed mostly to the quick reopening.

"Commodity prices rise naturally, even dramatically, early in economic growth. Rising commodity prices at this point in an economic cycle are generally an indication that an economy is getting steam, instead of an indication that inflation is on the horizon "Leve said.

Bailard's chief investment officer observed that the US economy never has experienced "hyperinflation," and it is unlikely to occur throughout the current recovery. Leve cautioned that hyperinflation might occur in emerging market countries such as Turkey or Argentina as a result of monetary easing by US authorities.

Leve highlighted that the past times of considerable inflation in the United States (1973, 1979) were triggered by supply shocks, especially in the oil, rather than monetary policy or above-average economic growth.

Leve stated that his "The greatest area of concern is that the fastest real economic growth in thirty years is backed by massive fiscal stimulus from the federal government and record-breaking 'excess savings' amassed by consumers during a year of hunkering down. These three sources of demand may put a burden on our economy's capacity to produce products, resulting in inflation."

"However, the nature of this inflation is most likely temporary: if factories and employees are again producing what starving customer needs, the headline inflation we are presently experiencing should drop," Leve said.