Bill Gross, money manager at Janus Capital Group Inc., said the global economy is “dangerously close to deflationary growth.”

Once there is a “whiff of deflation, things tend to reverse and go badly,” Gross said Friday in a Bloomberg Radio interview with Tom Keene. Gross pointed to how the CRB Commodity Index isn’t just at a cyclical low, but lower than in 2008 when Lehman Brothers Holdings Inc. went bankrupt.

Full Interview: Bill Gross Sees 25 Basis-Point Fed Rate Rise in September

The commodity markets tell a truer story of what is happening in the economy because they are subject to real-time supply and demand, Gross said. Oil, metals and crops have plunged as China’s economy has decelerated and gluts in multiple markets have further depressed prices.

Gross, who joined Janus in September after abruptly leaving Pacific Investment Management Co., manages the $1.5 billion Janus Global Unconstrained Bond Fund.

He said the Federal Reserve will raise interest rates next month by 25 basis points.

“September is the number for sure,” said Gross, who used to manage the world’s largest bond fund.

The Fed is “mentally committed to moving before year end,” he said, despite the Bank of England’s Monetary Policy Committee this week voting 8-1 to keep its key rate at a record low and talking about changing policy next year.

A move in September is “not unanimous” but is the “majority opinion” now, Gross said. Any increase will likely be 25 to 50 basis points. A 50 basis point move would “scare the market,” he added.