Latent Phase-Shift Rollback: Inference-Time Error Correction via Residual Stream Monitoring and KV-Cache Steering

Large language models frequently commit unrecoverable reasoning errors mid-generation: once a wrong step is taken, subsequent tokens compound the mistake rather than correct it. We introduce $\textbf{Latent Phase-Shift Rollback}$ (LPSR): at each generation step, we monitor the residual stream at a critical layer $l_{crit}$, detect abrupt directional reversals (phase shifts) via a cosine-similarity $+$ entropy dual gate, and respond by rolling back the KV-cache and injecting a pre-computed steering vector. No fine-tuning, gradient computation, or additional forward passes are required. LPSR achieves 44.0% on MATH-500 with an 8B model versus $28.8\%$ for standard AR ($+15.2$ pp; McNemar $\chi^2 = 66.96$, $p < 10^{-15}$). Critically, prompted self-correction, the most natural inference-time baseline, scores only $19.8\%$, below standard AR; LPSR exceeds it by $+24.2$ pp ($\chi^2 = 89.4$, $p \approx 0$). LPSR also outperforms Best-of-16 ($+7.8$ pp) at $5.4\times$ lower token cost, and surpasses a standard 70B model ($35.2\%$) with $8.75\times$ fewer parameters at ${\sim}3\times$ the token budget. A 32-layer sweep reveals a novel $\textbf{detection-correction dissociation}$: error-detection AUC peaks at layer-14 ($0.718$) but task accuracy peaks at layer-16 ($44.0\%$ vs. $29.2\%$), demonstrating that optimal monitoring depth differs for detection and correction.