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Amid Economic Gains New Trouble on Horizon

The U.S. Federal Reserve is staying the course on monetary policy, taking no action and leaving interest rates at historically low levels.  This, despite a steady improvement in economic conditions in the U.S. and around the world.

Gasoline prices are on the rise, but it doesn't seem to be slowing down American consumers.  Retail sales rose in February at the fastest pace in five months - fueled by higher demand for automobiles.

"Actually, it is a very good headline for the economy," said Bloomberg TV's Susanne O'Halloran. "It shows that consumers are more comfortable spending.  What was also interesting, as well, was [that] the January number was revised a little bit higher."

The steady recovery in the U.S. job market and a second bailout for Greece also helped to lift investor confidence, pushing stock prices higher on Wall Street for the fifth day in a row.

But even as fears of a Greek default fade into the background, German market analyst Robert Halver says investors are already looking ahead to the next potential worry for the eurozone.  

"We've got a new problem child in Euro-land: Spain. Spain should do its homework, especially economic reforms," he said. "Spain has to deregulate its absolutely inflexible job market."

Spain missed its deficit target last year and is unlikely to reach it again this year. And with an economy four times bigger than Greece, experts say a potential bailout is not in the cards.

For the world's two biggest economies - a new trade war may be brewing.

On Tuesday, President Obama said the U.S. has joined the European Union and Japan to challenge China's export restrictions on rare earth minerals that are crucial in the production of electronic devices.

"So our administration will bring this case against China today [Tuesday]," said President Obama. "We will keep working every single day to give American workers, and American businesses, a fair shot in the global economy."

Meanwhile, Beijing continues to wrestle with the effects of a cooling economy.

China recently posted its biggest trade deficit in 10 years, prompting its central bank to relax monetary policy and slow the appreciation of China's currency.  The yuan has risen 30 percent against the U.S. dollar since 2005, but the United States believes the yuan remains undervalued - giving China a competitive edge in export prices.

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