Merrill Lynch has noted that small caps historically outperform in the one, three, six, 12, and 24 months following Fed rate cuts, and the firm's head of portfolio strategy Marci McGregor points out that this pattern has held since 1990.Fed rate cuts affect small caps faster. Smaller companies tend to borrow from banks with short-term loans, while large companies have the ability to issue bonds with much longer durations (6+ years). That means when the Fed cuts rates — like its three consecutive cuts in 202 ...