Select "Sauté" to preheat the Instant Pot. When the word "Hot" appears on the display add the chopped onions and bacon and cook without the lid, stirring occasionally, until bacon is crisp and onions are soft.
Add beef and dust with flour. Stir all together and sauté until beef is browned on all sides. Deglaze the pot with red wine, scraping the brown bits from the bottom of the pan with a wooden spoon.
Add the mushrooms, bay leaves, thyme, and tomato paste and season the goulash with salt and white pepper to taste.
Press "Cancel" to turn the cooker off. Close the lid and steam valve on the instant pot.
Cook on high pressure for 30 minutes, and then allow the pressure to release naturally for 15 minutes before doing a quick release.
Serve sprinkled with fresh parsley if desired.
Notes
Did you know that onions are an excellent thickening agent? The more onions and the longer they cook, the thicker the sauce.
If mushrooms are too big for a single bite, cut them in half or even quarter them. No rules here.
If the meat cubes are too large, cut them in half (about 1-inch).
If you can't find beef pre-cut stew meat, purchase a chuck roast and cut it into cubes yourself.
Make sure that you do not cook too much beef on the pot at the same time. Over-crowding your pot will result in the meat being steamed versus seared.
Also, make sure that you do not cook the meat straight out of the fridge, either. Using cold meat will lessen the heat from the pan and will steam instead.
The alcohol in the wine dissolves as it simmers in the pot. However, if you are not a fan of using it on your dish, you can always use an equal amount of beef stock.
If the sauce is getting too thick, depending on the cooking method you're using, add water (see post for additional cooking methods).
Aside from bay leaves and thyme, you can also use rosemary, oregano, parsley stalks, or sage. But again, you don't need to add all of it in your stew; choose one or two, depending on how you want the flavors to turn out.
This dish is also delicious the next day and it freezes well.
Use up leftovers to make pot pies.
For best results read additional tips in the post above.
Please keep in mind that nutritional information is a rough estimate and can vary significantly based on products used.