TCW Group CEO Katie Koch: We could see some 'quiet quitting' of the U.S. bond market long term

Watch on YouTube ↗  |  January 21, 2026 at 12:03  |  6:36  |  CNBC
Speakers
Katie Koch — Reporter, The Information

Summary

Katie Koch, CEO of TCW Group, discusses the market reaction to trade tensions and the 'Sell America' narrative at Davos. She sees short-term market pressure and volatility, but expects an eventual policy off-ramp. Longer term, she warns of a 'quiet quitting' of the US bond market as foreign investors diversify away from US assets. She favors JGBs, sees parts of Europe and emerging markets as more attractive than Treasuries, expects persistent rate volatility, and wants volatility to re-add credit exposure.

  • Koch calls the prior day's selloff a 'Sell USA' day but says it does not yet make a trend.
  • She thinks Europe is unlikely to dump its US bond holdings despite retaliation talk.
  • TCW expects foreign investors to continue diversifying away from US bonds over the long term.
  • Koch favors JGBs after record spread widening and sees parts of Europe and emerging markets as more attractive than Treasuries.
  • She expects persistent higher rate volatility as foreign price-insensitive buyers step back.
  • TCW is underweight credit and wants volatility to re-add exposure.
  • A trade off-ramp could bring market relief, but volatility is likely to remain.
Ideas
Katie Koch Reporter, The Information 2:11
Foreign buyers quietly quitting US bonds
Koch warns of a longer-term 'quiet quitting' of the US bond market as foreign asset owners look to diversify away from the US. She cites push factors including overexposure after years of US outperformance, high US indebtedness, currency weakness, and policy uncertainty, as well as the pull of renewed global diversification benefits. She notes TCW was a seller of US Treasuries and that foreign price-insensitive buyers stepping away has already raised long-end rate volatility.
TLT HIGH
Katie Koch Reporter, The Information 3:16
JGBs attractive after record spread widening
Koch says JGBs sold off for reasons separate from the 'Sell USA' narrative and widened 50-60 basis points to record spreads, which she viewed as great buying. TCW sold US Treasuries and bought JGBs at those levels, closing its underweight by 80%, and she expects Japan to remain more attractive than parts of the Treasury market.
Japanese government bonds HIGH
Katie Koch Reporter, The Information 3:30
Europe and EM more attractive than Treasuries
Koch argues that Japan, Europe, and parts of emerging markets look more attractive than parts of the Treasury market, driven by valuation and the return of global diversification benefits. She expects investors to continue diversifying away from US bonds.
VGK EEM MED
Katie Koch Reporter, The Information 4:10
Persistent higher rate volatility expected
Koch expects persistent higher rate volatility in the long end of the curve. She explains that foreign buyers who were price-insensitive have stepped away, leaving the investment community more involved, which has already raised rate volatility and should keep it elevated.
Interest Rate Volatility HIGH
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This CNBC video, published January 21, 2026, features Katie Koch discussing TLT, Japanese government bonds, VGK, EEM, Interest Rate Volatility. 4 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Katie Koch  · Tickers: TLT, Japanese government bonds, VGK, EEM, Interest Rate Volatility