Impact of Central Bank Actions on Asset Classes

As a macroeconomic analyst for a major investment firm, you are conducting a detailed analysis of recent trends in both inflation and central bank monetary policy. Your research indicates that inflation has been persistently above the central bank's target, prompting speculation about the potential for accelerated interest rate hikes. Furthermore, you notice that consumer sentiment has recently declined, reflecting growing concerns about rising prices and economic stability. Given these observations, you are tasked with predicting the potential impacts on various asset classes.

Which of the following outcomes is most likely to occur if the central bank responds to high inflation with significant interest rate increases?