The Federal Reserve has announced a massive new government intervention in the US economy. The Fed says it will buy up $1.2 trillion in government bonds and mortgage-linked securities to free up the frozen credit market. The purchases will increase the Fed’s holdings in financial markets to $3 trillion, an increase of 50 percent. The new mortgage securities purchase will account for more than half of the new spending, at $750 billion. That’s on top of the $500 billion in securities previously bought. According to analysts at Wachovia Bank, the federal government could end up funding up to 70 percent of mortgages issued this year.