Climate models struggle to produce sea surface temperature (SST) gradient trends in the tropical Pacific comparable to those seen recently in nature. Here, we find that the magnitude of the cloud‐SST feedback in the subtropical Southeast Pacific is correlated across models with the magnitude of Eastern Pacific multi‐decadal SST variability. A heat‐budget analysis reveals coupling between cloud‐radiative effects, circulation, and SST gradients in driving multi‐decadal variability in the Eastern Pacific. Using this relationship and observed feedback estimates, we find that internal Eastern Pacific SST variability is underestimated in most models. Adjusting for model bias increases the likelihood of generating a cooling trend at least as large as observations in preindustrial control simulations by 56% on average. If models underestimate climate “noise,” as our results suggest, this bias should be accounted for when attributing the relative importance of forced versus unforced changes in the climate.