Understanding the global economy in 2026: What can quants expect?

Lloyds Bank economist Trevor Williams shares his 2026 outlook and his views on AI applications.

Trevor discusses the surprisingly strong economic growth (despite initial recession fears due to tariffs), which he expects to continue in 2026. Trevor expects markets to be active, creating a lot of volatility, risk, and – consequently – opportunities! Finally, Trevor shares his views on AI use in quant finance, emphasising the importance of human oversight in the process.

2026 economic outlook

Despite a challenging start marked by the looming threat of tariffs and the possibility of a global recession, he observes a turnaround. The economic growth for this year has been promising and is likely to continue into 2026.

The impact on derivatives and the role of quants

Trevor emphasizes the importance of volatility in quants’ work, pointing out how ongoing market activities, combined with risks from financial markets, economic shifts, and geopolitical tensions, present both challenges and opportunities.

A notable point is the surge of investment stemming from an aging population, reflecting an increased flow of savings into financial institutions. This creates a fertile ground for derivatives firms and quants, as they navigate the inherent risks and potential returns.

Harnessing artificial intelligence in quantitative finance

As the discussion moves to artificial intelligence, Trevor expresses caution about the myths surrounding AI. He articulates that while not genuinely "intelligent" or autonomous, AI provides valuable tools for rapid risk assessment and trading. The key is programming that aligns with one's business objectives, enabling smarter and faster decision-making.

Trevor underscores that despite these technological advances, the human element remains crucial. Trust in algorithms must be paired with continuous oversight and evaluation. He stresses the need for human involvement to ensure these programmes function correctly and adapt to changing circumstances.

Discover the future of quant finance with leading practitioners and experts at QuantMinds International. Save the date – 16-19 November 2026!