DoubleLine Capital CEO Jeffrey Gundlach said Tuesday long-term Treasurys will outperform next year as the risk of deflation grows greater. "Buy long-term Treasurys," Gundlach told CNBC's Scott Wapner at the Future Proof FestivaI. "In spite of the fact that the narrative today is exactly the opposite, the deflation risk is much higher today than it's been for the past two years. I'm not talking about next month. I'm talking about sometime later next year, certainly in 2023." Even as inflation continued to surprise to the upside, the so-called bond king believes deflation is now the bigger threat, especially with the Federal Reserve aggressively raising interest rates and slowing down the economy. If inflation turns into deflation, the Fed will be forced to reverse its monetary policy, which could drive bond yields down. Treasury prices will then rise if yields fall. The 30-year Treasury yield hit a high of 3.574%, its highest level since 2014 following the hot CPI report. The benchmark 10-year yield shot up to 3.46% Tuesday, its highest level since mid-June. Ark Invest's Cathie Wood is one of the most vocal proponents of deflation. She said Tuesday that she is seeing many signs of easing price pressures in the pipeline already, including falling commodity prices. In terms of other asset classes, Gundlach said the biggest opportunity coming is emerging markets. He added that he will not buy EM assets until the dollar breaks below its 200 moving avg. "When it does, you want to be in big," Gundlach said.