Following a rough series of sessions for the banking industry, Zurich-based global investment bank and financial services firm Credit Suisse (US:CS) faces rising questions about its viability. Although the troubled enterprise received a governmental lifeline, CS stock – which initially popped higher on the news – eventually closed the Thursday session flat against the prior day’s result.

According to The Associated Press, on Wednesday, the Swiss National Bank stated that it was prepared to support Credit Suisse because it meets the financial requirements demanded on “systemically important banks.” Subsequently, the central bank agreed to loan the financial services giant up to 50 billion Swiss francs ($54 billion) to bolster confidence. Notably, Credit Suisse represents Switzerland’s second-biggest lender.

To tame wider concerns, the Swiss National Bank stated that the problems associated with the U.S. banking sector do not “pose a direct risk of contagion” to Switzerland. Recently, state regulators closed Silicon Valley Bank (US:SIVB) and Signature Bank (US:SBNY), with the Federal Deposit Insurance Corp. (FDIC) eventually assuming control.

Nevertheless, both investors and banking clients remain jittery despite regulators reassurances that depositors’ funds are safe. According to Russ Mould, investment director at the online investment platform AJ Bell (UK:AJB), government entities “don’t want anybody to be the person who sits in a darkened room or darkened cinema and shouts fire, because that’s what prompts a rush for the exits.”

Unfortunately, the wider circumstances place the Federal Reserve on a knife’s edge. As Reuters noted, the Swiss extension of a lifeline to CS stock raised serious doubts regarding global central banks’ efforts to curb skyrocketing inflation through aggressive interest rate hikes.

Per the news agency, the European Central Bank remarked that it was “monitoring current market tensions closely and stands ready to respond as necessary to preserve price stability and financial stability in the euro area.”

Last year, Fed Chair Jerome Powell, in his monetary policy speech at Jackson Hole, Wyoming, stated that “[r]estoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below-trend growth.”

However, this commitment to tackling inflation has met its first significant challenge. Indeed, one of the contributors to the present dilemma in the U.S. banking sector stemmed from higher interest rates. This dynamic reduced the market value of bond portfolios stacked with lower-yielding debt securities, meaning that some enterprises sat on unrealized losses.

Moving forward, the Fed may be forced to pick the least-bad option, which may cause severe pain regardless. Therefore, investors have reason to maintain caution toward CS stock and its ilk.

This article originally appeared on Fintel

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