T^2MLR: Transformer with Temporal Middle-Layer Recurrence

Complex structured reasoning tasks often require additional computation, yet current language models obtain it mainly by increasing parameter scale or by serializing intermediate steps as chain-of-thought (CoT) tokens. The former raises training and deployment costs, while the latter ties reasoning computation to autoregressive output length. We introduce Penelope, an efficient latent-reasoning framework for pretrained decoder-only Transformers that localizes recurrent computation to a selected decoder interval. The lower decoder prefix is evaluated once to construct a problem-conditioned boundary memory, which is then iteratively refined through time-modulated GRU dynamics and recurrent readout states before answer generation. A progressive CoT-to-latent curriculum transfers visible reasoning into this internal recurrent path, allowing additional computation to be allocated in latent space without repeatedly executing the complete decoder or generating a long intermediate trace. Experiments on open-source structured-reasoning benchmarks show that, at validation-selected latent budgets, Penelope attains competitive accuracy relative to established latent-reasoning models while reducing measured inference latency. These results show that latent refinement can be localized to a narrow decoder interval, reducing repeated full-decoder execution without generating a long visible reasoning trace and providing a practical accuracy-efficiency tradeoff for decoder-only Transformer models.

Standard Transformers have a fixed computational depth, limiting their ability to generalize to tasks that require variable-depth reasoning. The usual remedy, Chain-of-Thought (CoT), spends tokens to reason, inflating the key--value cache and making latency grow with the step count, so memory becomes the limiting cost when reasoning is served over large query batches. We study a depth-recurrent Transformer that decouples computational depth from parameter count by iterating a shared-weight block, so that each added reasoning step costs flat memory and linear latency, with no token generation. Three ingredients keep the recurrence stable for 20+ thinking steps: a silent thinking objective that supervises only the final output, LayerScale initialization, and an identity-biased gate that opens a gradient highway across steps. We characterize it on three compositional domains with decreasing structural bias: graph reachability (adjacency masking), nested boolean logic (relative positioning), and unstructured relational text (no positional cue). We find a \emph{computational frontier}: accuracy climbs once the thinking-step count meets the task's complexity, reaching near-perfect performance on the two structured tasks and a lower plateau on unstructured text. How it climbs depends on the structural bias---abruptly from chance on the graph task, gradually on the other two. Depth recurrence extrapolates beyond the training range: it succeeds on the graph task where fixed-depth models barely extrapolate, and on the two sequence tasks comes within two points of fixed-depth Transformers that use $4$--$6.4\times$ more parameters. On the graph task, whose adjacency mask makes propagation depth verifiable, intermediate per-step supervision---a standard recipe for deep iterative models---consistently \emph{harms} this extrapolation. We release the code for reproducibility.

Language models typically reason via explicit chain-of-thought (CoT), generating intermediate steps token-by-token. Latent CoT offers an alternative: it performs multi-step reasoning in the model's hidden states, replacing decoded tokens with continuous representations for greater efficiency. However, existing latent CoT methods underperform explicit CoT beyond 1B parameters, and the gap widens with scale. Looped, or recurrent-depth, Transformers, which reuse their weights to increase computation depth without adding parameters, are a natural fit for latent reasoning. We therefore ask whether looped Transformers can bridge this gap. We answer affirmatively with a simple recipe: a looped padded Transformer that processes K latent blocks in parallel for R iterations, with a cross-entropy loss on each latent position's gold CoT-step token, similar to explicit CoT supervision. We instantiate it as LOTUS (Looped Transformers with parallel supervision on latents). LOTUS is, to our knowledge, the first latent-CoT method to bridge the gap to explicit CoT at the 3B scale, while cutting thought-phase latency by 2.5x-6.9x from compact math expressions to natural language. Projecting LOTUS's post-loop latents through the base LM head recovers the gold reasoning steps and even surfaces alternative valid intermediate steps, evidence that its latent space is interpretable and CoT-aligned. Ablations confirm that both the looped backbone and the parallel supervision on gold CoT tokens are essential. Code is available at https://github.com/yingfan-bot/lotus.