The Fed raised rates in 1994. I don't recall a crash. The Fed raised rates in 1989. I don't recall a crash. You need to read John Kenneth Galbraith's book: "A History of Financial Euphoria". It's all there. A bubble every 20-30 years and everyone has the same traits. Nobody sees it, nobody blames themselves but they blame everyone else. Somebody must PAY!
I just looked up the special liquidity facility. So what? Certain banks can pay over and above the discount window rate for money? Big deal. Have you ever been the officer at a bank who has to go to the discount window for money? It's like you are the heathen banker of the forest. They don't treat you very well. They don't cooperate with you at all. You'd BETTER have a real good reason and it'd better not be that your bank is going under.
The Fed wasn't targeting the stock market either. That only happened in 1929 and 1999. In late 1999 and early 2000 it was already clear the economy was slowing on its own. Do you know why?
You might also want to look at price levels in 1989 and 1994. The situation was very different in 1999. The dollar was already very strong and commodities were making multi year lows. Raising the rates made no sense, unless he was attacking the stock market (though it still made no sense).
The Special Liquidity Facilty also had the promise that the Fed would buy all sorts of securities in order to keep the financial system afloat. Not only did it make the dollar a safe haven for Y2K but also stocks and and other financial instruments. I don't think it's a coincidence that the steepest part of the bubble occured as soon as the facility was announced (October 1999). Even though it didn't have to be used it had the effect of a gigantic rate cut.