Add pasta, water, butter, salt, garlic powder, mustard powder, and black pepper to the bowl of your Instant Pot. Stir briefly and gently to combine.
Cover and set the lid to “Sealing.” Cook on Manual high pressure for 4 minutes, followed by a quick release of the pressure (cover the vent with a dishtowel or cloth when releasing to prevent splatter). Once it's finished, carefully remove the lid.
Add in the cheeses and gently stir until they are fully melted.
Add the milk, starting with 1/2 cup (and working up to as much as 1 cup total, as needed) and stir until everything is combined and the sauce is creamy (if your sauce seems thin, let everything sit for a few minutes until it thickens up).
Add freshly cracked black pepper and serve!