The Federal Reserve formally set its annual inflation target at 2% in 2012. Then in 2016 it made a subtle but important clarification. It stated that the target is “symmetric”—rather than a “ceiling” as the European Central Bank has adopted. This means inflation can deviate modestly above or below the target in the short run without causing alarm.

The Fed has raised the federal-funds rate eight times in the past three years, and inflation now stands right at the 2% goal. A hard inflation ceiling would justify pre-emptive...