Standard & Poor's reduced its estimate for next year's U.S. economic growth to 2.6 percent from the 3.1 percent growth it expected last quarter.

The credit ratings agency said in a report that "significant downside risks" from government spending cuts sparked the change, CNBC reports.

"We've lowered our forecast for U.S. GDP growth in light of the additional sequester [automatic] spending cuts in 2014 as well as the potential for another political standoff in Washington after the October government shutdown," S&P explains.

Editor’s Note: Obama Donor Banned This Message (Shocking)

To be sure, Democrats and Republicans in Congress struck a deal Tuesday that reduced some of the automatic spending cuts slated for fiscal 2014, which began Sept. 30.

The deal calls for a discretionary budget of $1.012 trillion for the year, compared to the $967 billion amount originally slated under sequestration.

The bipartisan accord does increase deficit reduction by $23 billion with the extension of a Medicare spending cut.

S&P also cites the Federal Reserve as a wild card.

"A disorderly response from financial markets to the Fed's unwinding of quantitative easing remains a shared and important risk for credit conditions around the world," S&P notes. But it expects Fed policy to stay highly accommodative.

Craig Wright, chief economist at RBC Economics, also expresses concern about Fed tapering.

"This is the exit period from this great experiment, so there are going to be some mistakes along the way and you don't want any small mistake being exaggerated," he tells Kitco News.

"We are truly in unchartered waters. We've never seen any central bank with a balance sheet so bloated."

Editor’s Note: Obama Donor Banned This Message (Shocking)

Related Stories:

• Moody's Zandi, Others Predict Economy Will Grow Over 3 Percent Next Year
• US Poised for Stronger Growth in 2014, Fed to Taper by March: Reuters Poll