By Davide Barbuscia

NEW YORK (Reuters) -Top U.S. asset manager Vanguard is bullish on corporate bonds despite high valuations, and while it expects tariffs will continue to be a risk for the U.S. economic and inflation outlook, those headwinds could be offset by further Federal Reserve interest rate cuts.

Investment-grade credit spreads – or the premium over U.S. Treasuries paid by high-rated companies to issue bonds in the U.S. market – declined to 74 basis points last week, their lowest since 1998, as investors pile into the asset class to grab higher yields than U.S. Treasuries, and as a Fed in rate-cutting mode is expected to encourage economic activity by lowering borrowing costs for U.S. firms.

“Credit spreads are near historical lows, but healthy fundamentals, attractive all-in y

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