The Federal Reserve pushed ahead with its plan to buy mortgage bonds issued by Fannie Mae and Freddie Mac yesterday, saying it would start buying early next month and purchase up to $500bn (£345bn) by the end of June.

The aggressive tactics – the Fed had previously said it would buy this amount over 'several quarters' – highlights the central bank’s determination to hammer down the risk spreads on the mortgage bonds and thereby reduce mortgage rates.

The Fed also announced that it had selected four asset managers – BlackRock, Goldman Sachs, Pimco and Wellington Management – to manage the process. It had agreed a “competitive fee structure” but did not disclose this.

Financial Times