We identify the precise hallmarks of the local magnetic moment formation and its Kondo screening in the frequency structure of the generalized charge susceptibility. The sharpness of our identification even pinpoints an alternative criterion to determine the Kondo temperature of strongly correlated systems on the two-particle level, which only requires calculations at the lowest Matsubara frequency. We showcase its strength by applying it to the single impurity and the periodic Anderson model as well as to the Hubbard model. Our results represent a significant progress for the general understanding of quantum field theory at the two-particle level and allow for tracing the limits of the physics captured by perturbative approaches for correlated systems.