Will Donald Trump provide a debt bailout to Puerto Rico after Hurricane Maria? In an interview last night with Geraldo Rivera for Hannity, Trump raised the issue of the territory’s massive debt crisis, and said that investors on Wall Street would have to “wave goodbye” to Puerto Rico’s bonds in order to allow them to rebuild. Needless to say, that got plenty of attention — including at the White House:

Trump spoke to Fox News’ Geraldo Rivera in an interview that aired exclusively on “Hannity” Tuesday evening. The president spend the day touring the damage left by Maria, the strongest hurricane to hit Puerto Rico in nearly a century.

“They owe a lot of money to your friends on Wall Street and we’re going to have to wipe that out,” Trump told Rivera. “You can say goodbye to that.”

Puerto Rico was facing a $74 billion public debt load prior to Maria and was struggling to recover from a decade-long recession that has caused hundreds of thousands of residents to leave for the U.S. mainland.

Trump’s remarks had an immediate impact on Puerto Rico bonds, and it was not salutary. Debtholders scrambled to get out of their investments, and the price hit a new low:

The price of Puerto Rico’s benchmark general obligation bonds tumbled to a record low on Wednesday after U.S. President Donald Trump suggested late on Tuesday the island’s massive debt load will have to be wiped out due to devastation caused by Hurricane Maria.

The bond due in July 2035, the island’s most recent benchmark debt issue, dropped by 12 cents to 32 cents on the dollar early on Wednesday. Trading volumes jumped following Trump’s comments and prices fell as low as 30.25 cents.

Fox’s Mike Tobin noted the impact while reporting that people in Puerto Rico remain “skeptical” that a bailout would come:

.@POTUS says Puerto Rico's debt must be wiped out; @MikeTobinFox reports. pic.twitter.com/FQZhgHOlCI

— Fox News (@FoxNews) October 4, 2017

They have good reason for skepticism. Budget director Mick Mulvaney, a former member of the House Freedom Caucus that has repeatedly warned against a bailout for Puerto Rico, rushed to issue a retreat. Not only does the Trump administration oppose a bailout, Mulvaney says they don’t know if Goldman Sachs — mentioned specifically by Trump — owns any of the debt in the first place:

But just one day after Mr. Trump’s remarks to Rivera, OMB Director Mick Mulvaney appeared to walk back the president’s comments, suggesting to CBS News’ Margaret Brennan that “we’re absolutely not” bailing out Puerto Rico.

Brennan reports that Mulvaney was not aware of why Mr. Trump referred to Goldman Sachs as the bank to step up in “wiping out” the debt and was not aware if Sachs did indeed own the debt.

Just what can Trump do about it anyway? Not much, a Deutsche Welle executive reminded the Wall Street Journal. Now that Puerto Rico is in bankruptcy, the decision on settlements will come from a federal judge, not the White House:

Gary Pollack, head of fixed-income trading at Deutsche Bank Private Wealth Management, said questions about Puerto Rico repaying its debts are up to the judge appointed in bankruptcy proceedings, not the president.

“The president can say whatever he wants, but the decision is not his to make,” Mr. Pollack said, adding that the president’s comments add to the risks associated with Puerto Rican debt.

The only other option would be for the US to buy the debt from Puerto Rico’s creditors, but that wouldn’t be up to Trump either, at least not on his own. Congress would have to appropriate those funds, which is precisely what bailout advocates wanted and what Mulvaney and his allies resisted. They wanted to avoid a repeat of the politically engineered automaker bankruptcies/bailouts, but the suggestion from Trump that he might be considering it certainly has investors spooked. That’s why it pays to be careful about one’s rhetoric, lest a bad situation deteriorate even further, as it appears to have done here.