Overall, it's clear that Powell and the Fed themselves don't fully understand how the situation in the Middle East will ultimately impact the economy. Hence the much talk about inflation and lower expectations for rate cuts.

It seems inflation is being prioritized, even though Powell acknowledges that the Fed is in a difficult situation and is trying to balance inflation with the labor market. However, we understand that under the current circumstances, they essentially have no choice, and there's a noticeable bias toward fighting inflation.
Therefore, it's possible that the number of rate cuts this year will be reduced—the stock market will react accordingly.