The Federal Reserve pushed ahead with its plan to buy mortgage bonds issued by Fannie Mae and Freddie Mac on Tuesday, 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.

To begin with, the asset managers will deal only with companies registered as primary dealers with the Fed, although these dealers will submit offers on the part of their customers.

The Fed said “the programme is being established to support the mortgage and housing markets and to foster improved conditions in financial markets more generally”.

The move comes as policymakers at the central bank and in both the outgoing Bush and incoming Obama administrations look to target mortgage rates in the hope that lowering them would arrest the decline in house prices and thereby support financial asset prices.

Many Washington-based analysts think there is still a chance that Hank Paulson, the outgoing Treasury secretary, will announce plans for low-cost 4.5 per cent mortgages for new home purchases before leaving office, based on a plan proposed by Columbia University professors Glenn Hubbard and Chris Mayer.

Barack Obama’s incoming economic team is also looking at ways to lower mortgage rates and ensure the availability of mortgage financing. Meanwhile, regulators are considering relaxing rules on refinancing in order to make it easier for borrowers with existing mortgages to take advantage of low interest rates.

The Fed is also focused on two other areas as it seeks to stimulate the economy – financing consumer loans and potential purchases of Treasury bonds.

To fund these operations it is expanding bank reserves rapidly – creating money in a similar way to if it were printing dollar bills.

The Fed is eager to increase the size of the financing programme in which it offers low-cost loans to investors who purchase new consumer loans bundled up as asset-backed securities. But to do so it will require more risk capital from the Obama Treasury, since the Fed is not legally permitted to lend with some expected loss.

Fed officials, however, believe they legally can buy Fannie and Freddie securities without limit since these securities are backed by the US government.