Credit rating agency Standard & Poor's has lowered the long-term U.S. credit rating to AA+ from AAA, saying that in its opinion, a recently passed deficit cutting plan by the U.S. government fell short of the goal of stabilizing the government's medium-term debt dynamics.

The S&P report was released late Friday, after the closure of global markets.

"The downgrade reflects our view that the effectiveness, stability, and predictability of American policy making and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011," S&P said in a report.

S&P said it was "pessimistic" that the recent agreement could lead to a broader fiscal consolidation plan that would stabilize the government's debt dynamics "any time soon."

The outlook on the long-term rating was also listed as negative and the rating could fall further.

"We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case," the report stated.

Shortly after the announcement, Rep. Kevin Brady, R-TX said he was "disappointed but not surprised."

Last week, President Obama and Congressional leaders reached a deal to raise the federal debt ceiling in an effort to avoid the first U.S. default. The agreement led to votes that averted the default by an August 2 deadline.

During the entirety of this week, however, U.S. stocks on the S&P 500 Index posted their biggest declines since 2008.