Investors may be making an unusual error when it comes to the Fed

Could the Fed catch the market off-guard?

After consistently allowing their expectations for Fed rate hikes to be pushed further and further into the future, investors may risk letting down their guards at just the wrong time.

After the Federal Reserve's first federal funds rate increase in December, the question going into 2016 was just how many times the central bank would raise its key short-term interest rate targets. The numbers then were substantially different than the numbers now.

For instance, it's almost nostalgia-inducing to remember that in February, Goldman's economics research team made news when they cut their expectations for the number of 2016 rates hikes to three from four.

Now Goldman's official call is that there's just a 75 percent chance that we see at least one rate hike this year.

Incredibly, that is still more than the market's looking for. According to the CME's Fed Watch tool, the 30-day fed funds futures prices imply less than a 40 percent chance that the U.S. central bank raises rates even once this year.

"The markets and the Fed have consistently overestimated the timetable for rate hikes," Eddy Elfenbein of the Crossing Wall Street blog wrote in a recent email. "If a robot endlessly said, 'the rate-hike timetable will be pushed back,' it would look a lot more prescient than a lot of well-paid economists."

Yet Elfenbein goes on to say that he now is in the "strange position" of believing "for the first time in a while [that] the market is underestimating the odds of a Fed rate increase."

Brian Kelly, of BK Capital, agrees that "the Fed could be a little more hawkish than what people are expecting." Thursday on CNBC's "Trading Nation, " Kelly said the clue that the central bank is seriously eyeing a rate hike is liable to come on Aug. 26, when Fed Chair Janet Yellen delivers a speech at the Fed's annual conference in Jackson Hole, Wyoming.

Kelly, long a market bear, adds that this is liable to have a deleterious effect on the market.

"To me, the biggest risk to the equity market is rising rates, because it gives people another place to invest besides stocks," he said.

In June, the Fed officials' median forecast was for two rate hikes in 2016. Fed watchers are eagerly awaiting the new projections for rate increases that are set to be released in late September.