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Recurrent neural networks have a strong inductive bias towards learning temporally compressed representations, as the entire history of a sequence is represented by a single vector. By contrast, Transformers have little inductive bias towards learning temporally compressed representations, as they allow for attention over all previously computed elements in a sequence. Having a more compressed representation of a sequence may be beneficial for generalization, as a high-level representation may be more easily re-used and re-purposed and will contain fewer irrelevant details. At the same time, excessive compression of representations comes at the cost of expressiveness. We propose a solution which divides computation into two streams. A slow stream that is recurrent in nature aims to learn a specialized and compressed representation, by forcing chunks of $K$ time steps into a single representation which is divided into multiple vectors. At the same time, a fast stream is parameterized as a Transformer to process chunks consisting of $K$ time-steps conditioned on the information in the slow-stream. In the proposed approach we hope to gain the expressiveness of the Transformer, while encouraging better compression and structuring of representations in the slow stream. We show the benefits of the proposed method in terms of improved sample efficiency and generalization performance as compared to various competitive baselines for visual perception and sequential decision making tasks.