The Fed is expected to shelve a stimulative bond-buying program later this year and to raise interest rates around mid-2015, depending on the economy. Less clear is when and how the central bank will stop reinvesting proceeds from maturing assets and let the portfolio shrink from its unprecedented size.
"While the optimal program for reducing the Fed's balance sheet will need to be dependent on the state of the economy, the recent tapering experience suggests to me that a predictable, transparent reduction in the balance sheet could be done in ways that may minimize the risk of financial disruption," said Rosengren, a dovish official who does not have a vote on policy this year.
Without backing it outright, he floated a "seamless continuation" of he regular $10-billion reductions to the Fed's monthly purchases of Treasurys and mortgage bonds. Once the buying ends, he said, the Fed could specify the percentage of bonds it would let mature and run off naturally, and even raise that percentage depending on economic progress.
Read MoreRate hike depends on 'tight' economy: Fed's Powell
"History shows that monetary policy 'exits' can be unsettled," Rosengren said in prepared remarks to the Central Bank of Guatemala.
The Fed has kept its key federal funds rate near zero for five-and-a-half years and bought more than $3 trillion in assets to help stimulate hiring and growth in the world's largest economy.
--By Reuters. CNBC.com contributed to this report.