Cinnamon Bread Pudding with Cranberry-Raisin Sauce

To prepare pudding: Preheat oven to 350ºF. Coat an 8-inch-square baking dish with cooking spray. Combine bread, 1/2 cup brown sugar, raisins, 1 teaspoon cinnamon, nutmeg, milk, eggs and vanilla in a large bowl. Allow the bread cubes to swell a bit and absorb the liquid, stirring occasionally, about 15 minutes. Transfer the bread mixture to the prepared baking dish. Place the dish in a larger baking pan filled halfway with hot tap water. Place together in the oven. Bake until a knife inserted in the center comes out clean, about 1 hour. Remove the baking dish from the water bath and let stand for about 15 minutes. To prepare sauce: Heat oil in a small saucepan over medium-high heat. Add mustard seeds, cover, and cook until the seeds stop popping (not unlike popcorn), 30 seconds to 1 minute. Stir in chiles to taste and cook until blackened and smoky, about 30 seconds. Add cranberries and raisins. Reduce the heat to medium and cook, uncovered, stirring occasionally, until the raisins are plump, about 2 minutes. Sprinkle with 1/4 cup brown sugar and 1/2 teaspoon cinnamon and cook, stirring, so the sugar melts, about 30 seconds. Pour in water and cook, uncovered, stirring occasionally, until the sauce turns syrupy-thick, 8 to 10 minutes. Remove the chiles. Slice the pudding into 8 pieces and spoon some sauce over each. Serve immediately.