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UPDATE 1-Fed's Rosengren draws line in the sand on QE3 bond buys

* Policymaker pitches dual thresholds for U.S. unemployment

* Wants bond buys at least until 7.25-pct jobless rates

* Wants near zero rates until unemployment falls to 6.5 pct

WELLESLEY, Mass., Nov 1 (Reuters) - The Federal Reserve should buy bonds at least until the U.S. jobless rate falls below 7.25 percent, a top Fed official said on Thursday, pitching a plan that would set the clearest end point so far for the central bank's quantitative easing program.

Under the view from Boston Fed President Eric Rosengren, who is one of 19 Fed policymakers, the U.S. central bank's large-scale asset purchases would continue as long as inflation expectations remained subdued and they would not necessarily stop once the 7.25 percent jobless threshold was crossed.

Wading deeper into the debate over what parameters the central bank should use for maintaining its ultra-easy monetary policy, Rosengren said he would like the Fed to keep interest rates near zero until the jobless rate falls to 6.5 percent.

The unemployment rate was 7.8 percent in September. The government will report labor market figures for October, including the jobless rate, on Friday.

The weak U.S. labor market and stumbling economic growth prompted the Fed in September to launch a third round of quantitative easing, or QE3, under which it is buying $40 billion worth of bonds per month, with no set end date.

The Fed has said it will buy mortgage debt and possibly Treasuries until the labor market outlook improves ``substantially'' - a term Fed policymakers are now attempting to define. Rosengren's take is the most specific yet.

``My own personal assessment is that, as long as inflation and inflation expectations are expected to remain well-behaved in the medium term, we should continue to forcefully pursue asset purchases at least until the national unemployment rate falls below 7.25 percent and then assess the situation,'' Rosengren, a voter on Fed policy next year, said.

Rosengren, who is firmly on the dovish wing of Fed policymakers, said he thinks of unemployment at about 7.25 percent as a threshold, not a trigger that would automatically change policy.

Other Fed policymakers have used only general terms to describe what they consider a ``substantial'' improvement in labor that would bring about an end to the bond buying. The Fed has now bought some $2.3 trillion in long-term securities in an unprecedented drive to spur growth and revive the economy after the worst recession in decades.

PLAN FOR LOW RATES

However, Rosengren's line in the sand on the federal funds rate - which has been near zero since late 2008 - comes after other regional bank presidents also pitched specific plans.

According to the minutes of the last two policy meetings, policymakers appear to be moving closer to setting formal markers, such as inflation and unemployment, that would cause the Fed reverse its aggressive efforts to boost the U.S. economy.

``My own personal view is that if inflationary pressures remain muted, then labor market conditions would need to be more like 6.5 percent unemployment to warrant the federal funds rate being lifted off the zero bound,'' Rosengren said.

Rosengren has consistently called for strong policy steps to lower the unemployment rate.

October's jobs report is expected to show non-farm employers added 125,000 jobs last month - not enough to prevent the jobless rate from edging higher. U.S. unemployment was as high as 10 percent in 2009.