Hungarian Walnut Kifli (Diós Kifli)

Ingredients

For the Dough

• 2 cups all-purpose flour
• 1 cup unsalted butter, softened
• ½ cup powdered sugar
• 1 cup finely ground walnuts
• 1 teaspoon vanilla extract
• 1 egg yolk
• Pinch of salt

For Finishing

• 1 cup powdered sugar
• 1 packet vanilla sugar, optional