Preheat the oven to 350F and line a large baking sheet with parchment paper.
In a large bowl, use an electric mixer to beat the softened unsalted butter and cream cheese together until completely smooth.
Add the granulated sugar to the bowl and cream the mixture on medium speed for about two minutes until it becomes light and fluffy.
Beating the butter, cream cheese and sugar thoroughly ensures the cookies have a wonderfully soft and tender texture. Pour in the milk and vanilla extract, then mix again until the wet ingredients are fully combined.
Add the all-purpose flour, baking powder and baking soda to the wet mixture. Mix on a low speed just until a soft cookie dough forms.
Scoop out small portions of the dough, roll them into smooth balls with your hands and place them on the baking sheet.
Gently press down on each dough ball to flatten them slightly, as these cookies will not spread as much in the oven.
Bake for 10 to 12 minutes until the edges are just barely golden. Cool on the pan for five minutes before moving them to a rack.
