SSH reading "/root/.ssh/known_hosts" from local or remote?

I am having issues connecting to a remote server with SSH and I'm trying to understand some output I am seeing from SSH when running a connection with the -vvv switch enabled.

I am running the below command from my project folder...

ssh -i keyfile.pem root@$REMOTE_HOST -vvv

Within the output I see that SSH is reading from "/root/.ssh/known_hosts". This may be a stupid question, but is this being read from the remote host or from the same folder on my box?

I am running as root on Kali (yes I know don't run as root).

OpenSSH_8.0p1 Debian-6, OpenSSL 1.1.1d  10 Sep 2019
debug1: Reading configuration data /etc/ssh/ssh_config
debug1: /etc/ssh/ssh_config line 19: Applying options for *
debug2: resolve_canonicalize: hostname $REMOTE_HOST is address
debug2: ssh_connect_direct
debug1: Connecting to $REMOTE_HOST [$REMOTE_HOST] port 22.
debug1: Connection established.
debug1: identity file key2.pem type -1
debug1: identity file key2.pem-cert type -1
debug1: Local version string SSH-2.0-OpenSSH_8.0p1 Debian-6
debug1: Remote protocol version 2.0, remote software version OpenSSH_4.3p2 Debian-9
debug1: match: OpenSSH_4.3p2 Debian-9 pat OpenSSH_2*,OpenSSH_3*,OpenSSH_4* compat 0x00000002
debug2: fd 3 setting O_NONBLOCK
debug1: Authenticating to $REMOTE_HOST:22 as 'root'
debug3: hostkeys_foreach: reading file "/root/.ssh/known_hosts" # HERE
debug3: record_hostkey: found key type RSA in file /root/.ssh/known_hosts:7
debug3: load_hostkeys: loaded 1 keys from $REMOTE_HOST

It is a local read. Ssh needs to check the identity of the server. Each user has its own list of servers.