Standard & Poor's slashes its forecast of U.S. economic growth over the next three years.

Standard & Poor's on Wednesday lowered its forecast of U.S. economic growth over the next three years, saying it anticipated another round of quantitative easing later this year.

The credit-rating agency said in a research note that although July data showed a slight improvement in the U.S. economy, growth in the second half of the year will be slower than previously expected. The U.S. economy grew 0.8 percent in the first half of this year.

The report forecast 1.9 percent growth in the third quarter and 1.8 percent in the fourth, lowering the outlook for full-year growth to 1.7 percent from 2.4 percent. The firm also revised down its growth expectations for 2012 and 2013 to 2.0 percent and 2.1 percent respectively.

S&P said market confidence in the economy's recovery and the government's ability to make decisions have tumbled. Although July jobs and retail sales data were better than projected, signs of recovery remain weak. S&P forecasted that the labor, financial and property markets will remain sluggish until 2013.

The research note said the Federal Reserve may begin a third round of quantitative easing later this year in order to prevent the U.S. from slipping into a second recession.

China's business press carried the story above on Friday.