Vanguard Sees Corporate Bonds Facing Pressure as Fed Takes Toll

Vanguard Group Inc. expects the US corporate-bond market to come under increased pressure this year as rising interest rates rattle investors and threaten businesses’ profits.

Arvind Narayanan, a senior portfolio manager and co-head of investment-grade credit at Vanguard, said the finances of corporations are “weakening incrementally” from very strong levels, which he anticipates will continue through the rest of 2022.

“The critical issue is the degree to which third-quarter earnings results and forward-looking guidance from companies surprises to the downside relative to expectations,” Narayanan said in an email interview.

The money manager, who helps oversee Vanguard’s $7.3 trillion in ...