Memory in the Loop: In-Process Retrieval as Extended Working Memory for Language Agents

Language agents run a loop - observe, reason, act - but the memory they reason over sits outside it: a store queried at most once per turn. We study the regime where memory moves inside the loop, read and written on every step. The obstacle has always been latency: networked stores answer in tens to hundreds of milliseconds, and in-loop retrieval can inflate end-to-end latency by up to 83x when retrieval is expensive. Prior work manages that cost rather than questioning it: serving-layer scheduling hides it, "memory-first" designs ration retrieval to once per turn. We argue latency is a property of where the store lives, not the in-loop pattern: an in-process store answers in ~100us, three orders of magnitude below the network regime, and at that speed the per-step tax collapses. By the extended-mind thesis's parity principle, a store fast enough to be constantly and directly available becomes extended working memory, not a tool the agent merely consults. The premise is causal: holding a fixed per-turn memory-latency budget and varying only the store's answer speed, redundant actions rise monotonically with latency - 0.0 of 12 at in-process speed, 7.2 of 12 at a 110ms cloud round trip (gpt-5-nano, gpt-5-mini; exact permutation p=0.0079). We demonstrate the regime end-to-end: across four GPT-5-class models under a bounded window, recall improves from 0/5 to 3.6-4.8/5 with in-loop memory, store ops at p50 80-165us - though an instructed restate-every-reply baseline also solves it perfectly, at a token cost that grows with the working set. The store never lost a fact in any run (244 of 244 writes kept); every miss traces to the agent's read policy, not the store. Our measurements also relocate the bottleneck: the dominant per-step cost is embedding (~200-400ms over the network); pairing the in-process store with a small local embedder returns the complete operation to a measured ~40us.