At the end of 2023 the median Federal Open Market Committee member expected that 2024 would bring economic growth of 1.4%, core inflation of 2.4% and three cuts in the federal-funds rate. Instead the economy is on track for about 2.5% growth and 2.8% core inflation. With the economy much stronger than expected and inflation more persistent, the Fed should have scaled back its rate moves. Instead it cut even more than expected. Its latest forecast envisions more cuts in 2025 even though its inflation expectations are worse than they were last year.

The traditional argument against a rules-based monetary policy is that it requires Fed officials to specify too many contingencies ahead of time. Policymakers must study dozens of indicators, talk to businesses and market participants, and take into account broader developments in the economy and world. That’s true no matter the Fed’s framework, and no rule would have counseled the central bank to cut interest rates to zero in March 2020 as it wisely did.

The Fed also has had better judgment than most of its critics. After making an egregious error in failing to raise rates until inflation was above 5%, the central bank cleaned up the mess more aggressively than most of its hawkish critics would have thought possible. In 2023 the Fed persisted with more hikes even as doves warned of lagged recession risks and a banking crisis and urged it to stop. The economy isn’t in perfect shape—the soft landing remains elusive—but it is much better than it might have been.

Yet insofar as the Fed has substituted its judgment for rules, the rules look better than the judgment. The Fed wouldn’t have needed so many supersize hikes in 2022 and 2023 had it followed any version of a Taylor rule, which would have called for rate increases starting in 2021 based on inflation and the unemployment rate. The initial progress on inflation in the second half of 2023 would have led to an earlier adjustment in rates without the need to catch up with a supersize cut in September 2024.

As it nears the New Year, then, the Fed might consider turning toward a monetary policy driven more by rules. That would consist of three imperatives.

First, the central bank should be clearer and more consistent about its intermediate targets. A longer-term target for overall inflation continues to make sense because that is what the public cares about, but the Fed should be more explicit about what it is looking at in the short run to separate the signal from the noise. If I had to pick one indicator, it would be the 12-month change in the market-based core personal-consumption expenditure index: the change in price for everything except food, energy and items without market prices. Different measures of underlying inflation aren’t very different in their predictive power, so it is most important that the Fed pick a yardstick and stick to it.

Second, the Fed should pick one rule, or a suite of rules, and publish what it would dictate at every FOMC meeting. If the committee chose a different course than the rule or rules would recommend, it would have to explain what judgments led it to do so. My own preference is a version of the Taylor rule that bases interest rates on past rates and current economic conditions, with added weight on the unemployment rate. This would smooth policy changes over time. Here, too, the most important thing is picking a rule and sticking to it. This method would currently recommend a fed-funds rate of about 5%, up from 4.25% to 4.5%.

Finally, to the extent the Fed departs from its rule over time, it must do so without prejudice. It is always too tempting to find excuses for why rates should be lower rather than higher. At any given time that may be true, but it adds up to an inflationary bias in monetary policy. The Fed must therefore adopt a practice of departing from its rule in both directions in equal measure.

Placing more weight on rules at the Fed could solve several problems. It would make monetary policy more predictable and understandable, reducing market volatility and enabling better investment decisions. It could also avoid the biases that have crept into the Fed’s decision-making in recent years. Changes in monetary policy would be more explicable—the way the central bank responds to incoming data would be more stable, but changing data would mean that policy would change accordingly. Clearer rules wouldn’t eliminate the need for judgment, but they would curb bias and increase confidence in overall policy.

Mr. Furman, a professor of the practice of economic policy at Harvard, was chairman of the White House Council of Economic Advisers, 2013-17.