Warm the pot: Set a medium pot or deep skillet over medium heat.
Add milk, water, garlic powder, onion powder, and a pinch of salt. Stir to combine.
Add the pasta: Stir in the macaroni and bring the mixture to a gentle simmer. Keep the heat at medium to avoid scorching the milk.
Simmer and stir: Cook for 8–10 minutes, stirring frequently so the pasta doesn’t stick.
The liquid will reduce and thicken as the pasta softens.
Check for doneness: When the pasta is just tender (al dente), turn the heat to low. If the pot looks dry before the pasta is ready, add a splash of milk or water.
Add richness: Stir in the butter and Dijon mustard until melted and smooth.
Cheese time: Remove from the heat. Add the cheddar (and Monterey Jack, if using) a handful at a time, stirring between additions until fully melted and silky.
If the sauce seems too thick, loosen with a tablespoon or two of warm milk.
Season and serve: Taste and add salt, black pepper, and a pinch of paprika or cayenne if you like. Serve right away while it’s ultra-creamy.