NEW YORK, Dec 12 Reuters Options traders are bracing for a week of swings in U.S. stocks ahead of key inflation data, the Federal Reserve39;s last policy meeting of 2022 and the final monthly options expiration of the year.

Inflation data and the Feds outlook on monetary policy could give traders more clarity on how much further the central bank may need to raise rates in its battle to cool consumer prices, potentially determining the trajectory of a lateyear rally in stocks that has seen the SP 500 bounce 14 off its October lows. The index remains down 17 for the year.

Pricing in the U.S. options market on Monday implied investors were positioned for the SP 500 to move 2.5 in either direction in the wake of Tuesdays consumer price report, which covers November, data from options marketmaking firm Optiver showed.

A big move would be par for the course in a year during which CPI data has sparked explosive market gyrations, as surging inflation forced the Fed to embark on its most aggressive monetary policy tightening since the 1980s.

The SP 500 has moved an average of around 3 in either direction over the past six CPI releases, including a 5.5 jump on Nov. 10, when inflation data came in weaker than expected. That compares with an average daily move of about 1.2 over the same period.

A second dose of softerthanexpected inflation data could bolster the case for those arguing that inflation may have peaked.

On the other hand, with the October CPI reading having spurred…