Inflation is just warming up, but by late spring it could get downright hot, even if temporarily.

February’s consumer price index — a measure of inflation — is expected to be up moderately when it is released Wednesday at 8:30 a.m. ET. By May, the pace of headline consumer inflation on an annualized basis could be double February’s pace.

The debate in the market is whether the spike is transitory as the Fed and many economists say, or the start of a bigger trend.

“The big question to ask is will that level of heat we’re going to see by May be sustained or not?” said Barclays senior U.S. economist Blerina Uruci.

“I’m in the camp of people who think probably not, but there are some who think the opposite,” she said.

Economists expect the consumer price index rose 0.4% in February, or up 1.7% from a year ago. That compares to a 0.3% increase in January, and a 1.4% rise on an annual basis.

When energy and food are excluded, the core CPI is expected to be up 0.1% in February, or an annual pace of 1.3%.

Signs of inflation are already showing up in the goods side of the economy, and Uruci expects that to spread to the service side.

Consumers will soon be armed with another stimulus check. Pent-up demand should start sending up prices on things like airfare, public transportation, hotels, dining out, and rental cars as more people feel comfortable leaving their homes.

Companies have already been dealing with a range of rising prices.

The National Association of Manufacturers in its quarterly survey Tuesday said the increasing costs of raw materials was the biggest challenge facing companies.

Manufacturers were upbeat, expecting output to exceed pre-pandemic levels in the next couple of months, the survey found. They also had difficulty finding workers, which could suggest a rise in wages in addition to other costs.

The manufacturers’ association pointed to a report from the Institute for Supply Management, showing the backlog of orders was at its highest level since 2004 and raw material costs were rising at the fastest rate since May 2008.

So far this year, oil prices are up more than 30%, while copper and lumber are up nearly 15%.

Jim Caron, head of global macro strategies at Morgan Stanley Investment Management, said the rise in inflation could rattle investors in the spring.

However, he agrees with an assessment laid out by Federal Reserve Chairman Jerome Powell that it will be transitory. Without wages moving up materially, Caron doesn’t expect to see a lasting trend, but that won’t stop investors from being concerned.

The $1.9 trillion fiscal stimulus package is expected to add juice to the economy. That has raised inflation concerns, and the market could be spooked by a CPI report that is any hotter than expected.

Gasoline prices were sharply higher in the January CPI report, up 7.4% though core inflation was flat. Gas prices could again be a factor in headline inflation in February.

Caron of Morgan Stanley said the market could get nervous when higher inflation readings show up in coming months.

“We all know there’s a rational component to it,” he said. “This should be an air pocket. The pilot told me we’re going to hit one, but I’m still nervous when we hit it.”

Prices are rising on Main Street as well. The National Federation of Independent Business’ small business survey found Tuesday that a net 25% of the firms it surveyed plan price increases.

By May, Uruci of Barclays says headline inflation could be as hot as 3.6%. “There is the base effect story, but that’s just mechanical. That’s just transitory noise,” she said.

“We have consumer demand for goods remaining strong, especially after the fiscal stimulus passed in December and we have another one coming,” Uruci said. “All these are keeping core goods prices strong. The one that’s lagging will be the services side.”

The Barclays economist expects a hand-off between goods inflation and services inflation. But she said services inflation will include temporary one-offs as the economy adjusts to increased demand.

“Until we have the population in unity and people moving freely and going into the services that require social distancing, we’re not going to have a build in prices,” Urici said. “That comes around Q3 or Q4. There could be some supply-side bottlenecks that manifest themselves in a few categories.”

Public transportation could see prices rise after a year of empty trains and buses.

Meanwhile, shipping costs are rising, which could affect imported goods, Urici added.

While markets have been nervous about an overheating economy, the bond market is not pricing a much higher pace of inflation.

Market-based expectations show inflation running at an average 2.2% over the next 10 years. That’s higher the Fed’s previously targeted 2%, but well within the scope of its new policy of targeting an average range around 2%.

The Fed favors the personal consumption expenditures price index as a measure of the rising costs of goods and services. Indeed, the so-called PCE deflator has been showing a subdued level of inflation, at a pace of about 1.5% in January.

Peter Boockvar, chief investment officer at Bleakley Advisory Group has been warning about inflation for months. “Inflation still never went negative,” he said. “The whole world was shut down and inflation was never negative.”

“The question is what happens in September, October and November? Those base effects can work their way out or they could be sticky,” Boockvar said. “I think they’ll be sticky.”

Meanwhile, Mark Zandi, chief economist at Moody’s Analytics, expects a burst higher in the inflation data in the spring, and then it will fall back.

“We’ll get some big numbers here in the next couple of months,” he said. “I think we’ll go back below 2% for a bit then we’ll reaccelerate. My sense is we’ll be consistently above 2% by the end of the year going into next.”

“Then by end of 2022, inflation will be consistently above the Fed’s target,” Zandi added. “By early 2023, I think they will be raising short term interest rates.” At that point, we will be at full employment, he said.

Zandi said inflation will be higher and could get to 2.5% to 3% ultimately. That may surprise investors.

“We’ll then have to work to get inflation back to 2%. That’s a problem [Fed officials] want,” he said. “I don’t think investors have bought into how high inflation will be….For 20, 25 years, we’ve barely gotten to 2%.”