From the quote, "I knew what the old man felt, and pitied him, although I chuckled at heart," we learn that the narrator possesses a complex emotional state. While they acknowledge a sense of pity for the old man, they simultaneously feel amusement or joy at his predicament. This duality indicates a level of cruelty, as the narrator takes pleasure in the fear of the old man, despite claiming to understand and feel compassion for him.
Therefore, the most accurate assessment of the narrator based on this quote is that the narrator is cruel.