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Grease an 8×8 inch casserole dish and set aside.
Cut bread into 1 inch chunks and spread evenly in the dish.
Whisk milk, eggs, sugar, melted butter, vanilla, cinnamon, and nutmeg in a large bowl.
Pour the mixture evenly over the bread and press to soak all pieces.
Let the bread sit for 20 to 25 minutes to absorb the custard.
Preheat the oven to 350°F (176°C).
Bake the pudding for 50 to 55 minutes until mostly set with a slight jiggle.
Check the center and bake a bit longer if it still looks loose.
Remove the pudding from the oven and let it rest for 10 minutes.
Melt butter in a medium saucepan over low heat.
Add sugar, heavy cream, and vanilla to the melted butter and stir.
Cook the sauce slowly until it coats the back of a spoon.
Remove the sauce from heat and spoon it warm over the pudding.