Motivated by the search for high moment materials, we present first-principles calculations of the magnetic moments for Fe clusters embedded in an Fe-Co alloy as well as in a pure Co matrix. Both spin and orbital contributions have been calculated with the use of a real-space linear muffin-tin orbital method within the atomic sphere approximation. The cluster sizes considered range from 1 to 51 atoms. We find an enhancement of the spin moments of the atoms close to the interface between the cluster and the embedding matrix. The spin moment enhancement is decreasing with increasing Fe content in the surrounding matrix. The slightly lower magnetic moments for the Fe clusters embedded in the Fe rich matrices can nevertheless result in a material with an enhanced saturation magnetization due to the higher moments in the matrix. We argue that the largest average magnetic moments for embedded Fe clusters are obtained for an ${\mathrm{Fe}}_{0.5}{\mathrm{Co}}_{0.5}$ alloy in the matrix surrounding the clusters.
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