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By Bloomberg

The Federal Reserve will delay raising U.S. interest rates until next year, a Morgan Stanley index shows.

Greece’s struggle to stay in the euro currency union along with plunging prices for Chinese stocks and commodities globally are all threatening to slow global economic growth. The International Monetary Fund on Tuesday reiterated its view that the Fed should wait until the first half of 2016 to act. The mix is driving a rally in Treasuries.

The U.S. central bank won’t increase borrowing costs until the first quarter of 2016, according to the Morgan Stanley index, which is based on an analysis of futures trading. As recently as last month, the gauge projected a shift by year-end. The Fed is scheduled to issue the minutes of its June 16-17 meeting at 2 p.m. Wednesday in Washington.

“Greece has been a headache,” said Park Sungjin, head of investment management in Seoul at Meritz Securities Co., which has $7 billion in assets. “The timing of the Fed rate increase will be postponed. The situation helps the Treasury market.”

The benchmark 10-year U.S. yield fell five basis points to 2.21 percent as of 6:55 a.m. in London, according to Bloomberg Bond Trader data. The price of the 2.125 percent note due in May 2025 rose 14/32, or $4.38 per $1,000 face amount, to 99 1/4.

U.S. government debt has returned 0.6 percent in July, after tumbling almost 2 percent during the previous three months, based on the Bloomberg U.S. Treasury Bond Index.

Greek Deadline

European leaders set a Sunday deadline for Greece to accept a rescue, saying otherwise they’ll take the unprecedented step of propelling the country out of the euro.

The Shanghai Composite Index plunged as much as 8.2 percent Wednesday on concern government measures to stabilize equities are failing to stem a three-week rout. The gauge has tumbled about 30 percent since its June peak.

The Bloomberg Commodity Index fell to the lowest level since March.

Mirae Asset Global Investments Co. isn’t ready to rule out the Fed acting in 2015.

The U.S. economy is strong enough to justify an increase as soon as September’s meeting, said Will Tseng, a portfolio manager for the company in Taipei.

“The U.S. fundamentals are still healthy enough for the Fed to tighten policy,” he said. Mirae has $70 billion under management.

Policy makers have kept their benchmark, the target for overnight loans between banks, in a range of zero to 0.25 percent, since December 2008. The way things are going, the rate may be staying lower for longer than anyone anticipated.