Look out, market watchers. The Federal Reserve may raise rates sometime this year, possibly catching the market off guard, Goldman Sachs' chief economist, Jan Hatzius, said Friday.
"We think they probably are underpricing [the chances of a rate hike]" Hatzius told CNBC's "Squawk on the Street."
"We have a 25 percent probability for a hike at the September meeting. So, we don't think it's going to happen but it's possible. Then, we've got 40 percent for the December meeting," he said.
According to the CME Group's FedWatch tool, market expectations for a rate increase in September held at 6 percent, and are just 22 percent for December.