A recession is coming and investors should be defensive, TCW CEO says


Katie Koch, CEO, the company with over $210 billion in assets under management, told CNBC’s Delivering Alpha conference that a recession was inevitable. We haven’t experienced a real recession in over a decade-and-a-half. “

While Wall Street has been bracing for a contraction for much of the past two years, the U.S. economy has stayed afloat due largely to a resilient consumer flush with cash and a labor market that has remained powerful.

However, Koch said the Federal Reserve’s interest rate hikes targeted at slowing the economy and bringing down inflation will start to bite. The timing and impact of higher rates is unpredictable and depends on many factors. We haven’t felt the impact of higher interest rates yet, but they are coming. She also spoke favorably of agency debt, mortgage-backed securities and Treasurys, as well as companies that have longer-duration capital. Koch also spoke favorably of mortgage-backed securities, Treasurys and agency debt. She also praised companies with longer-duration equity. Learn more about CNBC’s Delivering Alpha

investor summit here