Preheat your oven to 325°F (163°C). Cut the bread into cubes and spread them on a baking sheet. Bake for 10–12 minutes until lightly dry.

Butter a 7-inch round baking dish generously, optionally lining the bottom with parchment paper.

Combine the baked bread cubes, raisins, and chopped pecans in a large mixing bowl. Gently toss to distribute evenly.

In another bowl, whisk together the half-and-half, sugar, eggs, egg yolk, vanilla extract, cinnamon, nutmeg, and melted butter until smooth.

Pour the custard mixture over the bread and stir gently to coat. Spoon the mixture into the buttered baking dish.

Add 1½ cups of water to the Instant Pot inner pot. Cover the pudding with buttered aluminum foil and place it on the trivet.

Lock the lid in place and cook on high pressure for 42 minutes. Let pressure release naturally for 12 minutes before manual releasing any remaining steam.

Allow the pudding to rest for about 5 minutes after cooking. Remove the foil carefully to avoid condensation drips.

Melt butter in a saucepan over medium heat, stir in sugar and heavy cream until it simmers, then add bourbon, stirring to combine.

Slice the warm bread pudding and drizzle with bourbon sauce. Serve with vanilla ice cream or whipped cream.