Feedbacks of clouds on climate change strongly influence the magnitude of global warming. Cloud feedbacks, in turn, depend on the spatial patterns of surface warming, which vary on decadal timescales. Therefore, the magnitude of the decadal cloud feedback could deviate from the long-term cloud feedback. Here we present climate model simulations to show that the global mean cloud feedback in response to decadal temperature fluctuations varies dramatically due to time variations in the spatial pattern of sea surface temperature (SST). We find that cloud anomalies associated with these patterns significantly modify the Earth’s energy budget. Specifically, the decadal cloud feedback between the 1980s and 2000s is substantially more negative than the long-term cloud feedback. This is a result of cooling in tropical regions where air descends, relative to warming in tropical ascent regions, which strengthens low-level atmospheric stability. Under these conditions, low-level cloud cover and its reflection of solar radiation increase, despite an increase in global mean surface temperature. These results suggest that SST pattern-induced low cloud anomalies could have contributed to the period of reduced warming between 1998 and 2013, and offer a physical explanation of why climate sensitivities estimated from recently observed trends are probably biased low.