Headline CPI inflation is almost certain to rise above 3% in June and July, according to Jeffrey Gundlach. It could even top 4%, he said, which would “really spook the bond market.”

Gundlach spoke to investors via a webcast, which he titled, “Looking Backward.” The focus was on his flagship total-return fund (DBLTX). Slides from the webcast are available here. Gundlach is the founder and chairman of Los Angeles-based DoubleLine Capital.

Gundlach’s co-presenter was Andrew Hsu, a portfolio manager for the total-return fund.

Looking Backward was a novel by Edward Bellamy, published in 1888, that predicted a utopian society would emerge in the U.S. in 2000. It created a political movement at the time of “Bellamy clubs” advocating, among other things, the nationalization of private property. It was driven by themes in late-19th century America, including a revolt against monopolies and a resentment of immigration from Europe that was driving down wages.

Those forces parallel many facing America now.

When the novel’s protagonist wakes up in 2000, the U.S. has been transformed into a socialist “utopia” with an economy based on the equal distribution of wealth and government-controlled business.

On the 100th anniversary of its publication in 1988, The New York Times wrote of the “appalling implications of its prophecies,” Gundlach said, and added that the newspaper would not be likely to say the same things today.

In the webinar, Gundlach addressed the issue of the government’s role in economic growth, but a central focus of the capital markets is inflation, so let’s start with his comments on that topic.