The Fed Is Off-Target on Inflation

For the past few months, one phrase has been on the mind of investors and policy makers alike: soft landing. With the Federal Reserve raising interest rates at a rapid pace since last spring in an attempt to bring down inflation, the fundamental question has been whether those hikes (and any future ones) will tip the economy into recession or instead slow it enough to cool inflation without sending the economy into reverse.

Objectively, things look pretty good. Inflation seems to be coming under control—the month-on-month inflation rate actually fell a bit in...