This is problematic.

At this week’s G-7 meeting, Donald Trump offered the world an unexpected glimmer of hope that maybe, just maybe, the U.S. and China might be making some progress ironing out their differences on trade. “China called last night our top trade people and said ‘let’s get back to the table,’ so we will be getting back to the table and I think they want to do something,” he said. “They have been hurt very badly but they understand this is the right thing to do and I have great respect for it. This is a very positive development for the world.”

“I think we are going to have a deal,” he added.

But things soon turned murky. A spokesman from China’s foreign ministry said he was not aware that any phone calls had taken place. And by Thursday, CNN was reporting that, yeah, the president had basically made the whole thing up.

Though Trump and Treasury Secretary Steven Mnuchin insisted there had been “communication,” aides privately conceded the phone calls Trump described didn’t happen they way he said they did. Instead, two officials said Trump was eager to project optimism that might boost markets, and conflated comments from China’s vice premier with direct communication from the Chinese.

The greater context is that Trump is basically desperate for any good news whatsoever as he’s launching his re-election campaign in the middle of a grinding trade war that has generated growing recession fears, while lacking any popular domestic policy accomplishments. So, he apparently fibbed to…give the markets a brief pop.

This might seem like a minor incident—just one more tuba skronk in the years-long marching band parade of fabulism that has been Trump’s presidency. But here’s the thing: Lying in public about a major economic issue is a very, very good way to make sure that the markets don’t trust a damn word that comes out of your mouth in the future. And while reasonably intelligent people should have learned by now to be wary of anything Trump says, the fact that his comments at the G-7 were taken as good news by anybody in the first place—I mean, stocks did rise—shows that investors still have (or had) some residual, if misplaced, trust in the president when it comes to basic factual descriptions regarding affairs of state. Guess they should have been more cynical!

Day to day, it might not matter if markets can trust the president’s word, or his treasury secretary’s for that matter. If it turns out something he said about talks with China was BS, traders can adjust. It will be a serious problem, however, in a real crisis where the administration needs to assure the world that it is, say, taking steps to halt a financial panic (see: 2008) or has a plan to deal with a dangerous international incident. It’s hard to stop the world from freaking out and markets from tanking when nobody believes you.