Wall Street's biggest firms are predicting intensifying bondlosses in emerging markets, where borrowing costs have alreadysoared to the highest level in more than four years versus U.S.corporate debt, as the Federal Reserve considers curtailing recordstimulus.

“We're not yet convinced that we've seen the worst in terms offlows out of emerging markets,” Jeffrey Rosenberg, the chiefinvestment strategist in fixed-income at New York-based BlackRockInc., the world's largest asset manager, said in a telephoneinterview, expressing his own views. “We see a lot of valuationchange but we see the potential for even more valuationchange.”

Investors have yanked $22.1 billion from emerging-market bondfunds since the end of April, almost five times the amount pulledfrom U.S. corporate credit, according to EPFR Global. That's pushedthe extra yield that buyers now demand to own dollar-denominatedemerging-market debt instead of U.S. company notes to 1.4percentage points, about the most since December 2008.