Add macaroni noodles, water, butter, dry mustard, onion powder, seasoned salt, and pepper to the Instant Pot.
Seal the lid and select manual pressure high. Set the timer for 6 minutes. Manually release pressure once completed.
Do not drain the water in the bottom. Stir in cream cheese to melt. Add ¼ cup milk slowly until blended.
Stir in cheddar and parmesan. Add the remaining ½ cup milk, mixing a little at a time, until desired consistency is reached. You may not need all of the milk.