Capital markets are well functioning and banks were trying to cover a massive reserve drain of roughly 170 billions in a few days (roughly the while bitcoin capitalisation, btw) because a large fiscal payment date for many corporate in the US.
Overnight rates were going up too fast, too quickly, so the FED downplayed the move with one of his tool.
I appreciate that, but my point still stands. If this was due to a payment date (I'm not sure it was, but let's assume for the sake of argument), then those payments were completely predictable, and yet the banks still couldn't pay them. The rates were only going up too fast because too many banks were running out of liquidity and having to borrow.
Yes, this is a tool the Fed can use, but they only had to use it because banks were irresponsible and backed themselves in to a corner. The fact that banks can print so much money out of thin air that they run out of even the small fraction of reserves that they keep and the Fed has to step in is a symptom of just how messed up fiat money is.