Position a rack in the center of the oven and preheat it to 400 F. Lightly grease a large, rimmed baking pan.
Combine the milk and crumbled bread in a large bowl and let stand for 5 minutes. Whisk in the egg, 1 1/2 teaspoons of salt, onion powder, garlic powder, 1/4 teaspoon of pepper, and nutmeg. Add the ground beef and pork and mix to blend thoroughly. Shape the mixture into 1-inch meatballs.
Arrange the meatballs in the pan and bake for 20 minutes, until cooked through. They should register at least 160 F on an instant-read thermometer. Remove to a rack and set aside.
Prepare the Sauce
Melt the butter in a large saucepan over medium heat. When the butter begins to sizzle, add the flour. Cook, stirring, for 2 minutes.
Gradually whisk in 1 1/2 cups of beef broth and the Worcestershire sauce and cook until bubbling and thickened. Gradually whisk in the heavy cream. If too thick, add more beef broth, a little at a time. Taste and adjust the seasonings with salt and nutmeg, if using.
Add the meatballs to the sauce and gently stir to coat; heat through.