Authored by Michael Maharrey via SchiffGold.com,

There is a growing consensus that the Federal Reserve can slay price inflation while guiding the economy to a “soft landing.” In fact, Fed economists now project the US economy will not spin into a recession. Other mainstream pundits and prognosticators have taken up this narrative. But there are plenty of reasons to doubt it.

Folks who are sanguine about the economy rely primarily on three metrics. First, we saw relatively strong GTP growth in the second quarter and the Atlanta Fed recently upped its Q3 GDP estimate to 5.9%. Second, the official labor market numbers continue to reflect strong job growth. And finally, despite rising interest rates and sticky price inflation, consumers have continued to spend money.

We can certainly question the veracity of some of this data, but even taking these three metrics at face value, there are plenty of reasons to believe the economy is quickly spiraling toward a recession. Consumers and businesses are being stretched to the limit by a combination of enormous debts, rising interest rates and persistent price inflation.

Here are 10 reasons to doubt the soft landing narrative.

1. Excess savings are running out. One of the reasons consumers have been able to keep up with price inflation is the fact that they piled up a lot of excess savings during the pandemic year. But that savings is nearly gone. Aggregate savings peaked at $2.1 trillion in August 2021. As of June, the San Francisco Fed estimated that aggregate savings had dropped to $190 billion. In other words, Americans have blown through $1.9 trillion in savings in just two years. At this pace, all of the excess savings Americans accumulated will be gone sometime during the third quarter.

2. Consumers are maxing out their credit cards. As Americans blew threw their savings, they turned to credit cards to make ends meet. Credit card debt rose to over $1 trillion for the first time ever in the second quarter of 2023. But there are signs consumers are close to maxing out their credit cards. In June, credit card spending suddenly fell off a cliff.

3. People are having a hard time paying their credit card bills. A combination of rising interest rates and increasing credit card balances are squeezing consumers. The number of Americans rolling credit card debt from month to month is now higher than the number of people paying their bills in full for the first time ever. Meanwhile, default and delinquency rates are rising, not only on credit cards, but also on personal loans and auto loans.

4. Student loan payments are about to resume. After enjoying a three-year break, student loan borrowers are about to pay the piper. Around 40 million Americans have outstanding student loans totaling $1.57 trillion. When payments resume, borrowers will find their finances squeezed. According to a survey, 56% of federal student loan borrowers say they will have to choose between making student loan payments and paying for necessities such as rent, bills and groceries. Moody’s estimates student loan repayment will deliver a $75 billion hit to consumption on an annual basis.

5. 401k hardship loans have spiked 36% this year. In other words, Americans are dipping into their retirement savings in order to make ends meet. This reveals just how much stress consumers are feeling. And like credit card borrowing and savings, this pool of money is finite.

6. Banks are tightening lending standards. The net percentage of banks tightening lending standards has soared from -32.4 in Q3 2021, to 50.8 in Q3 of this year. The lack of available credit will almost certainly slow consumption down the road.

7. The cost of housing continues to soar. Mortgage rates have soared to the highest level in over two decades. Combined with a tight market, housing affordability has hit a nearly four-decade low. Rents have also blown through the roof.

8. The financial crisis continues to bubble under the surface. In early August, Moody’s cut the credit rating of 10 small and midsize banks. It also placed six large banks on review for potential downgrades and revised 11 more banks from a stable outlook to a negative outlook. Later in the month, S&P Global followed Moody’s lead and downgraded the credit ratings of five banks. It also lowered the outlook for several others. The Federal Reserve managed to paper over the banking crisis with a bailout program. But the growing number of banks with credit rating downgrades reveals the problem wasn’t solved.

9. Corporate defaults have surged. By the end of June, the number of corporate debt defaults in 2023 had already exceeded the total number of defaults last year. Moody’s projects that corporate defaults will continue to surge with the default rate coming in at 4.7% globally. In the worst-case scenario, defaults could rise as high as 13.7%, surpassing the number of defaults in 2008.

10. Monetary policy works with a lag. A lot of people believe in a soft landing because, despite a sharp, rapid increase in interest rates, the economy hasn’t crashed — yet. But history tells us that it takes a while for the impacts of tighter monetary policy to work their way through an economy. The Great Recession didn’t kick off until nearly two years after the last Fed rate in June 2006.

[ZH: 11. This morning’s JOLTS data was a shitshow across the board, blasting any ‘soft landing’ narrative.]

Economists Robert Murphy and Jonathan Newman pointed out the similarities between 2006-2007 and today in a recent podcast. Murphy summed it up.

In other words, all the reasons that right now they’re saying, ‘OK, we’re out of the woods. We got a soft landing,’ that was true back then as well. It wasn’t that unemployment started rising rapidly. No, they said, ‘OK, we raised rates steadily over the course of a while here. We raised them from 1% all the way up to 5.25%. We’re starting to get CPI under control. This housing bubble is starting to get a little under control. Everything seems great.’ So, my question is would it be fair to say as of late 2006 that the Fed had achieved a soft landing and gotten the housing bubble under control? Most people would say, no. They had sown the seeds for the worst crisis since the 1930s. And likewise, right now, the data are eerily similar to that, and yet everyone is running around talking about a soft landing.”

The bottom line is the US economy runs on easy money. The central bank ran three rounds of quantitative easing during the Great Recession and held interest rates at zero for nearly a decade. The Fed doubled down during the pandemic. That led to massive levels of debt and all kinds of distortions in the economy, along with surging price inflation. The Federal Reserve has now taken some of that easy money away. There is no reason to think that the economy can just keep “plugging along” in this (relatively) high interest rate environment.

Things might seem OK now, but things tend to happen slowly and then all at once.

With Bitcoin languishing back at pre-ETF excitement levels – despite hashrates reaching record highs – the news this morning has re-awakened those animal spirits in crypto.

The U.S. Court of Appeals for the DC Circuit issued its opinion in Grayscale v. SEC this morning, ruling that the agency was unreasonable to deny the crypto giant permission to launch a Bitcoin ETF.

The win by Grayscale on Tuesday comes after the firm sued the SEC in June 2022 – when the US securities regulator blocked the crypto-focused asset manager from converting its Bitcoin Trust (GBTC) to an ETF. 

The firm had argued that the SEC’s approval of ETFs investing in bitcoin futures contracts, but not proposed products that would hold bitcoin directly, is “arbitrary and capricious.”

“The denial of Grayscale’s proposal was arbitrary and capricious because the Commission failed to explain its different treatment of similar products,” wrote Judge Neomi Rao.

Grayscale CEO Michael Sonnenshein said in a Tuesday tweet that the company’s legal team is “actively reviewing” the court’s decision.

🚨 JUST IN 🚨

The D.C. Circuit ruled in favor of @Grayscale in our lawsuit challenging the SEC’s decision to deny $GBTC‘s conversion to an ETF!

Thank you to everyone who has been on this journey with us, especially our investors. We are grateful for your support and…

— Sonnenshein (@Sonnenshein) August 29, 2023

Bitcoin is up from $26,000 to $27,000 on the headline.

Grayscale says converting to an ETF would help it unlock about $5.7 billion in value from the $16.2 billion trust by making it easier to create and redeem shares.

GBTC itself is up around 17% on the news, compressing its discount to NAV even more dramatically…

As Fortune.com reports, the ruling does not mean the SEC has to immediately implement the ruling.

The SEC has 45 days to appeal the decision, which could then go either to the U.S. Supreme Court or a so-called ‘en banc’ review, a legal procedure used when a team of judges handles a case deemed to be extremely complex.

While it could appeal the decision, it is also facing applications for Bitcoin ETFs from traditional financial firms like BlackRock and Fidelity, which makes it more likely the agency will simply accept the court ruling and approve applications in coming weeks.

Of course, the SEC will likely not take this denial well and, as some industry participants have noted, will now seek another means to stop this ETF leading top more widespread adoption of crypto.

For months we have been warning that at a time when the US economy is careening into a hard landing recession, the manipulated, seasonally-adjusted, and politically goalseeked job openings data released as part of the DOL’s JOLTS report is sheer rubbish (see “US Job Openings Far Lower Than Reported By Department Of Labor“; “Handle The JOLTS Data With Care“, “Just Make it Up: Job Openings Unexpectedly Soar As Labor Department Now Guessing What The Number Is“). Today, the BLS finally got the memo.

With consensus expecting only a modest drop in the July job openings from 9.582 million to 9.5 million, what the BLS reported instead was a doozy: in July there were just 8.827 million job openings, the first sub-9 million print since March  2021. It was also the 3rd biggest miss on record!

Worse, had the BLS not drastically slashed the May number from 9.582MM to a laughable 9.165MM, the drop would have been almost 800K job openings. And yes, today’s downward revision…

… continues the recent trend of every single data point int he Biden administration being revised sharply lower in subsequent month(s), in a coordinated propaganda attempt to make the economy look stronger, then quietly revise it away when everyone forgets.

All the 2023 monthly jobs data was revised lower and now all the housing data has also been revised… drumroll… lower pic.twitter.com/20Om6rHvFJ

— zerohedge (@zerohedge) August 23, 2023

Every monthly payrolls number in 2023 has been revised lower to manipulate perception and markets pic.twitter.com/T6qyXuqY7a

— zerohedge (@zerohedge) August 4, 2023

Industrial Production 1.0%, Exp. 0.3%, Last revised lower to -0.8%
Manufacturing production 0.5%, Exp. 0.0%, Last revised lower to -0.5%
Cap utilization 79.3%, Exp. 79.1%, Last revised lower to 78.6%

— zerohedge (@zerohedge) August 16, 2023

And while one month does not a trend make, three months does, which is bad because the 3-month drop in job openings was 1.5 million, the second highest on record surpassed only by the total economic shutdown during the covid crash.

According to the BLS, the largest decrease in job openings was in professional and business services (-198,000); health care and social assistance (-130,000); state and local government, excluding education (-67,000); state and local government education (-62,000); and federal government (-27,000). By contrast, job openings increased in information (+101,000) and in transportation, warehousing, and utilities (+75,000)

The plunge in the number of job openings meant that in July the number of job openings was just 2.986 million more than the number of unemployed workers, the lowest since August 2021.

Said otherwise, in July the number of job openings to unemployed dropped to just 1.51, the lowest level since Sept 2021.

As the number of job openings cratered to the lowest in more than two years, the number of people quitting their jobs – an indicator traditionally closely associated with labor market strength as it shows workers are confident they can find a better wage elsewhere – also plunged by 253K to just 3.549MM (after tumbling 265K in May), the lowest since Feb 2021.

And just in case some still believe the “Bidenomics” strong jobs lie, the number of hires also crashed in July, plunging by 167K to just 5.773 million, the lowest level since Jan 2021.

So what to make of this ugly data which as not only UBS, but also the NFIB…

… Opportunity Insights…

… and even Goldman …

… have been warning is long overdue?

The answer is simple: while the drop was substantial, the real number of job openings remains still far lower since half of it – or some 70% to be specific – is guesswork. As the BLS itself admits, while the response rate to most of its various labor (and other) surveys has collapsed in recent years, nothing is as bad as the JOLTS report where the actual response rate has tumbled to a record low 31%

In other words, more than two thirds, or 70% of the final number of job openings, is estimated!

And at a time when it is critical for Biden to still maintain the illusion that at least the labor market remains strong when everything else in Biden’s economy is crashing and burning, we’ll let readers decide if the admin’s Labor Department is plugging the estimate gap with numbers that are stronger or weaker.

As for the Fed, now that the labor market has officially cracked – because a sub 9mm print means that the rate hikes are really taking their toll on the economy – no surprise that odds of a May rate hike tumbled back below 50% after the huge JOLTS miss…

… and no surprise that stonks are surging: we are now officially back into “bad news is great news” for the market mode, since the end of Biden’s fiscal stimmy means that only the Fed is available to kickstart the economy when it officially slides into a recession next.

A much weaker than expected JOLTS print (3rd biggest miss on record and downward revisions) sparked the kind of event risk chaois in markets that we had warned about.

First things first, the recent hawkish trend in rate-change expectations have been smashed dovishly lower…

Source: Bloomberg

Which sent the dollar lower, erasing the post-Powell spike…

Source: Bloomberg

And sparked a bid in bonds, big-tech (long duration) stocks, bitcoin, and gold.

Treasury yields plunged, led by the short-end (with 2Y yields back below 5.00%)…

Source: Bloomberg

Bitcoin exploded back up towards $27,000…

Source: Bloomberg

Spot Gold spiked back up to $1935…

Source: Bloomberg

And stocks extended earlier gains led by Nasdaq…

Some serious moves across asset-classes – we do not expect them all to hold.

After reaching two year highs in July, The Conference Board  consumer confidence survey was expected to show a very modest decline in August. Instead it plunged from the best in two years to the weakest since May (July was revised down from 117 to 114 and then August printed 106.1, dramatically below the 116.0 exp).

The Present Situation plunged to its lowest since Dec 2022 and expectations tumbled…

Source: Bloomberg

“Consumer confidence fell in August 2023, erasing back-to-back increases in June and July,” said Dana Peterson, Chief Economist at The Conference Board.

“August’s disappointing headline number reflected dips in both the current conditions and expectations indexes.

Write-in responses showed that consumers were once again preoccupied with rising prices in general, and for groceries and gasoline in particular.

The pullback in consumer confidence was evident across all age groups—and most notable among consumers with household incomes of $100,000 or more, as well as those earning less than $50,000. Confidence held relatively steady for consumers with incomes between $50,000 and $99,999.”

“Expectations for the next six months tumbled back near the recession threshold of 80, reflecting less confidence about future business conditions, job availability, and incomes.

“Consumers may be hearing more bad news about corporate earnings, while job openings are narrowing, and interest rates continue to rise—making big-ticket items more expensive.

Notably, expectations for interest rates jumped in August after falling two months ago. Also, the outlook for stock prices fell and average 12-month inflation expectations ticked up.

The measure of expected family financial situation, six months hence (not included in the Expectations Index) softened further.”

Meanwhile, inflation expectations ticked up from Oct 2020 lows…

Source: Bloomberg

The Conference Board’s measure of labor market tightness worsened slightly last month (less jobs plentiful vs hard-to-get)…

Source: Bloomberg

The proportion of consumers saying recession is ‘somewhat’ or ‘very likely’ ticked down again in August but remain elevated at 69.0%.

So a weaker stock market and stickier prices finally broke the optimism cycle? Or is this reflective of Americans hitting the credit wall together?

By Michael Every of Rabobank

Jackson Hole: “Does my R* look big in this?”

The Jackson Hole central banking symposium has been running at its Wyoming venue since 1981. As such, it spans almost the entire neoliberal economic era in which central banks have been independent rockstars, not the boring civil servants following a political lead of prior decades. Ironically, 2023’s event, titled “Structural Shifts in the Global Economy,” pointed out an intellectual hole at central banks and their sudden lack of power, prompting look-in-the-mirror criticism. In particular, the focus was on the size of their R*s now politics matters again – that’s as President Biden released a video about tbuilding middle-class bottoms up and out as the American dream, rather than letting things trickle down.

R* is the term for the presumed ‘neutral’ short-term interest rate expected when an economy is at full strength and inflation is stable. That sounds obscure, but it matters hugely now rates are no longer at 5,000-year lows. R* tells us where rates will peak and are likely to stay close to. The valuation of many tens of trillions of financial assets depends on this; more so because a huge part of that asset pile is still hoping we will soon go back to 5,000-year low rates. Yet ‘the Hole’ saw central banks say the global backdrop has changed, and imply that so have their R*s.

FOMC Chair Powell’s speech, ‘Inflation: Progress and the Path Ahead’, said: “We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.” On R*, he noted, “the supply and demand dislocations unique to this cycle raise further complications… there is evidence that inflation has become more responsive to labor market tightness than was the case in recent decades,” leading to uncertainty. Especially when the White House whiteboard is talking about surging investment and rising middle-class wages.

ECB’s President Lagarde’s speech, ‘Policymaking in an age of shifts and breaks’, was not a paeon to zero-hour contracts as would have been the case four years ago. Instead, she quoted Kierkegaard’s “Life can only be understood backwards; but it must be lived forwards,” who aptly wrote ‘Fear and Trembling’. She noted three structural shifts: (i) “profound changes” in the labour market; (ii) the energy transition; and (iii) geopolitical shocks, and argued that whether these will prove permanent is unclear, “but it is already evident that, in many cases, their effects have been more persistent than we initially expected.” As a result, pre-Covid GDP models where swings in demand are most important “may no longer be appropriate [as] we are likely to experience more shocks emanating from the supply side.” She’s completely right there: our models are wrong.

Moreover, these larger relative price shocks can be transmitted more easily because they act as an “implicit coordination mechanisms vis-à-vis their competitors” for firms who are “not only more likely to adjust prices, but also to do so substantially.” That’s the Sellers’ Inflation economists are busier explaining doesn’t happen than looking at the political-economy of why it does. Meanwhile, tight labor markets mean “[when] workers have greater bargaining power, a surge in inflation can trigger “catch up” wage growth which can lead to a more persistent inflation process.”

The only responses, she argued, are: clarity, flexibility, and humility. Central banks have to stress that rates will stay higher for longer, show flexibility in analysis, and “be clear about the limits of what we currently know and what our policy can achieve.”

BOE Deputy Governor Broadbent’s speech, ‘The economic costs of restricting trade: the experience of the UK’, (spuriously) argued there’s no evidence that less globalised trade is more effective at protecting from economic shocks. It also underlined that unwinding second-round energy-price effects in wage inflation will not be as rapid or as marked as their emergence. As a result, “policy will probably have to remain in restrictive territory for quite some time yet.” He also pondered if “perhaps the wage Phillips curve is convex – falls in unemployment from low levels have more powerful effects on inflation than those from higher levels. Or maybe these two underlying drivers –the worsening terms of trade and the tight labour market– have interacted in some way, each amplifying the effect of the other, i.e. there’s a multiplicative term in the Phillips curve…. in the face of these uncertainties, setting monetary policy becomes a good deal more complicated.” And just after he spoke, UK air-traffic control failed on a Bank Holiday weekend.

In short, all of the above speeches answered the question “Does my R* look big in this?” in the positive, which is never well-received: we can expect markets to be unhappy too when they twig.

At the short end of the yield curve, central banks are going to err on the side of caution via higher for longer: yesterday’s $45bn 2-year US auction cleared at 5.02%, the highest since 2008. Further down the curve, if central banks are right about the global backdrop changing, inflation is not going back to 2% without a larger R* to sit on it. However, if they are wrong, keeping rates high is likely to risk deflation, in which case they will have managed to tear the economy a new R*, BOJ style. Then we will see what the White House whiteboard says.

Worryingly, central bankers have been wrong for decades. Indeed, in a moment of delicious pathetic fallacy, when they went on a hike at Jackson Hole with some economists this weekend, they were reportedly forced to retreat due to a summer downpour involving hailstones(!) Talk about “not having a playbook,” as Lagarde out it, or, as Powell did, “navigating by the stars under cloudy skies.” I’m only listening to central bankers now because they are willing to say they have been wrong and are guideless, which is the first step towards wisdom.

However, market forecasts of a return to 2% CPI *and* lower interest rates are still not accepting that their demand-side DSGE models are wrong, and are assuming central banks are in control when they just made it clear that they aren’t, and don’t pretend to be! Even the central bank markets were most sure was always in control, the PBOC, is looking increasingly powerless – and note the rally and sell-off in Chinese stocks yesterday.

Regardless, many economists and analysts will insist on a small R* with no deflationary downside. That’s the ‘safe’ choice: to forecast a large R* is to bring down calamity; to forecast a small R* is to imply calamity being brought down on us. Even safer is not to read any of the Jackson Hole speeches, nor think about Sellers’ Inflation, changes to labour markets, deglobalisation, geopolitics, nor the energy transition, and just focusing on the ‘positives’, i.e., neither Powell nor Lagarde backed a September hike. (Oops! Mester and Holzmann both then did.)

There are some central banks who prefer to avoid serious thinking too. We get to hear from RBA soon-to-be Governor Bullock today, but as things stand the Reserve Bank implies it may stop hiking at just 4.1% and then lower rates soon(ish), even as Melbourne houses already sell at auction for a million dollars over the asking price. On which, I recall Scottish comedian Billy Connolly noting that because we can’t see our own backsides, we choose somebody else’s and project that as a mirror of ours: except we cheat by choosing a much smaller one than our own.

On structural changes in general and property in particular, what we didn’t get from Jackson Hole was talk of the need for multiple R*s for different sectors as part of a policy response, which is where I think we head in time via rates hikes and acronyms like QE for the ‘right kind of investment’, or rate cuts and acronyms like QT for the ‘wrong kind’. If you accept everything else they said, this shift will follow.

Of course, that will need a ring-fenced economy, as normal before Jackson Hole began to run, and political ideology to match. Central banks, looking for a new playbook or not, aren’t ready to back *that* kind of shock until politicians are – but some of them are starting to mumble it.

The National Archives and Records Administration (NARA) revealed it’s in possession of some 5,400 records that contain email pseudonyms that President Joe Biden used during his tenure as vice president. 

The jarring number was revealed in a letter from the Archives to the Southeastern Legal Foundation (SLF), which last year filed a Freedom of Information Act (FOIA) request for any documents that referenced three pseudonymous email accounts: robinware456@gmail.com, JRBWare@gmail.com and Robert.L.Peters@pci.gov.  

“We have performed a search of our collection for Vice Presidential records related to your [June 9, 2022] request and have identified approximately 5,138 email messages, 25 electronic files and 200 pages of potentially responsive records that must be processed in order to respond to your request,” said the letter from NARA. 

Roswell, Georgia-based SLF received that letter last year, but made it public on Monday as it announced it has taken its FOIA pursuit to the next level, by filing a federal lawsuit against the Archives to compel the release of the records.  

“SLF requested these now highly sought after emails from NARA on June 9, 2022, through a Freedom of Information Act (FOIA) request,” said the group in a statement. “Unfortunately, after identifying nearly 5,400 potentially responsive records, NARA has dragged its feet and still has not produced a single email. SLF now turns to the court, asking it to order NARA to produce Biden’s emails.”

The revelation of the high quantity of documents comes on the heels of a push for the same documents by House Oversight Committee Chairman James Comer. Earlier this month, he sent a letter to NARA asking it to turn over any unredacted documents that reference the pseudonyms. 

“Joe Biden has stated there was ‘an absolute wall’ between his family’s foreign business schemes and his duties as Vice President, but evidence reveals that access was wide open for his family’s influence peddling,” said Comer in a statement.

“We already have evidence of then-Vice President Biden speaking, dining, and having coffee with his son’s foreign business associates,” Comer continued.  “We also know that Hunter Biden and his associates were informed of then-Vice President Biden’s official government duties in countries where they had a financial interest. The National Archives must provide these unredacted records to further our investigation into the Biden family’s corruption.”

While mystery swirls around the several thousand documents, we do know that one of the emails details plans for a phone call with Ukraine’s former president, Petro Poroshenko. An aide to Biden, John Flynn, copied Hunter at his email address at Rosemont Seneca Partners – while Hunter was serving on the board of Ukrainian energy giant, Burisma, which was deemed to be corrupt by the Obama-Biden State Department.

Authored by Jack Phillips via The Epoch Times,

Arizona Republican candidate Kari Lake announced an upcoming trial date in a lawsuit to acquire mail-in ballot signatures nearly a year after the November 2022 midterm election.

“We are scheduled for a 2-day trial set for September 21 & 25th,” Mrs. Lake wrote on X, the platform formerly known as Twitter, over the weekend.

“I will never stop fighting for Honest & Transparent Elections.”

In a separate statement to The Gateway Pundit, Mrs. Lake also said that the recent court order “is a huge victory for election transparency.”

“We’re moving forward,” she said.

Superior Court Judge John R. Hannah Jr. wrote (pdf) on Aug. 24 that a two-day trial will start on Sept. 21 at 9 a.m., with exhibits that will be submitted during the trial due by Sept. 14.

Earlier in the year, a Maricopa County Superior Court judge ruled that Mrs. Lake’s request to access affidavit envelopes shouldn’t be dismissed. Mr. Hannah wrote in June that county recorders generally include ballot affidavit envelopes in voter registration records, saying that the court is “not required to defer to the elections officials in how they have historically interpreted” the law.

He refuted arguments that were submitted by Maricopa County lawyers, who had argued that ballot affidavit signatures are a portion of the voter registration record. They’re also considered confidential under state law, the lawyers said.

“I am not convinced that the ballot affidavit is a voter registration record,” Mr. Hannah told the Arizona Capitol Times two months ago.

“It is a record from which the election officials derive information that becomes part of the voter registration record, but that doesn’t mean the ballot affidavit itself is a voter registration record.”

Starting last year, Mrs. Lake has attempted to contest the results of the 2022 election in court, while her Democrat opponent, Katie Hobbs, was sworn in as governor in early January. Multiple courts in Arizona have dismissed her lawsuits, although Mrs. Lake has said that she’ll take her challenge to the U.S. Supreme Court if need be.

Mrs. Lake, a former local television anchor, argued that thousands of Republican voters were disenfranchised on Election Day due in part to voting machine problems that were confirmed by Maricopa County officials on that day. The GOP candidate has also pointed to what she called problems with Maricopa’s signature verification process for mail-in ballots.

Maricopa County Recorder Stephen Richer had announced in June that he was suing Mrs. Lake for defamation and alleged that she falsely accused him of misdeeds during the 2022 election. Last week, Mrs. Lake filed a motion and asked Maricopa County Superior Court Judge Jay Adleman to dismiss Mr. Richer’s defamation lawsuit because it violates state law.

Her lawyers said in the court filing that Mr. Richer’s lawsuit should be thrown out because he brought the suit to “deter, retaliate against, and prevent Defendants’ lawful exercise of their free speech rights on the core public issue of election integrity.”

Senate Race?

Mrs. Lake has signaled that she may run for Arizona’s Senate seat in 2024, potentially setting up a three-way battle between her, former Democratic Sen. Kyrsten Sinema (I-Ariz.), and Democratic Senate candidate Ruben Gallego, currently a House representative.

Arizona Sen. Kyrsten Sinema, here in 2019 when she was a Democrat before becoming an independent, could be embroiled in a three-way race in 2024 in seeking a second term. (Manuel Balce Ceneta/AP Photo)

“I’m contemplating it,” Mrs. Lake said when asked in a recent Fox News interview.

“I mean, I could go off and go back into media and make a fortune, but this is not the season for that, this is the season for saving our country.”

Mrs. Lake said that any decision about running for Senate would come in the coming months.

“We have an opportunity to pick up a seat and prevent it from falling into the hands of somebody who is a socialist or worse and taking and getting an America First senator in D.C.,” she stated.

“I’m contemplating it and I’ll make a decision here in the next couple of months.”

If she enters the race, Mrs. Lake, a vocal proponent of former President Donald Trump, would have competition from the GOP side.

Pinal County Sheriff Mark Lamb, a Republican, announced earlier this year that he’s running for the seat. Other Republicans could also enter the primary. However, some analysts say that because of her name recognition and support for former President Trump, she’ll likely be the Republican nominee.

“We’re seeing with Donald Trump that, even though he’s a very divisive candidate with independents, he’s loved by Republicans. Same with Kari Lake. I don’t think there’s any chance she loses the nomination if she runs,” Brian Darling, a Republican strategist, told The Hill.